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homebuyers, real estate agents and other parties were delighted.

"the national day holiday plan has been temporarily adjusted. we have formulated a new marketing plan in the next few days to make a full effort to impact the 'golden september and silver october'." after the announcement of the reduction of existing mortgage interest rates and the unification of the minimum down payment ratio for mortgages, the marketing director of a private real estate company in shenzhen seemed very excited. "the sales performance during the just-passed mid-autumn festival was average, so we must make a good push this time!"

on september 24, the state council information office held a press conference. pan gongsheng, governor of the people's bank of china, said at the meeting that the interest rates of existing mortgages will be lowered and the down payment ratio of mortgages will be unified, guiding the interest rates of existing mortgages of commercial banks to drop to the level of interest rates of newly issued loans. the average drop is expected to be about 0.5 percentage points. in addition, the down payment ratios for first and second mortgages will be unified. as soon as the news came out, real estate companies, home buyers and all parties in the market were full of expectations for the new policy.

early loan repayment is expected to cool down

"the long-awaited reduction in the interest rate on existing mortgage loans has finally been officially announced!" the reporter immediately interviewed several second-hand homeowners. everyone's first reaction was excitement, but they also hoped that the bank would issue relevant details as soon as possible. a deeper reason why the market calls for a reduction in the interest rate on existing mortgage loans is that the current interest rates on existing mortgage loans are generally higher than the interest rates on new loans. according to a report by cric research center, the average commercial loan interest rate for the first home in 30 key cities is currently 3.21%, while the average interest rate on existing mortgage loans is about 4%.

taking the shenzhen market as an example, data from the shenzhen leyoujia research center shows that if the existing mortgage interest rate in shenzhen drops by 0.5 percentage points, the current mortgage interest rate for homeowners who previously bought houses is mostly 4.15%, and the interest rate may be adjusted to 3.65%. based on a pure commercial loan amount of 3 million, with a 30-year equal principal and interest loan, the monthly payment at a 4.15% interest rate is 14,583.1 yuan, and the monthly payment at a 3.65% interest rate is 13,723.79 yuan, saving 859.31 yuan per month and about 309,300 yuan in total interest.

"i just repaid the loan of 500,000 yuan in savings in advance, and i feel a lot more relaxed." recently, chen cheng (pseudonym), who bought a house at a "high price" in 2021, shared with reporters his mortgage "burden reduction" process. "my mortgage interest rate is over 4.5%, and the pressure is really a bit high. there are many buyers who choose to repay the loan in advance like me." however, he also said, "if the interest rate of existing mortgage loans is lowered, the willingness to repay the mortgage in advance will be reduced, and the money saved every month can also appropriately increase consumption."

li yujia, chief researcher of the housing policy research center of the guangdong provincial urban planning institute, said that the people who currently bear high interest rates are mainly those who bought houses between 2017 and 2021. many of these people are young people, new citizens and some investors who entered the city during the peak period of the last round of urbanization. at present, housing prices in many cities have fallen back to around 2017. if the interest rate is too high and the repayment pressure is high, some groups may face the risk of defaulting on their mortgages. "the impact of this interest rate cut also benefits the existing loans for first-time homebuyers in key cities. at present, the interest rates for first-time homebuyers in first-tier cities and cities such as xiamen and hangzhou are relatively high, and the positive impact this time is relatively large. in the context of a large downward cycle of interest rates, delaying the application for a loan is the best option, but this interest rate cut dispels the concerns of homebuyers that the interest rate of existing loans may be lowered on a regular basis to maintain its balance with the interest rate of incremental loans. in addition, early loan repayment will be significantly alleviated, which is conducive to promoting consumption. on the one hand, it supports real estate consumption, and on the other hand, it stabilizes domestic demand by increasing the activity of real estate, especially to hedge against deflation. at the same time, it is also to combat illegal replacement of mortgage loans such as bypassing business loans and consumer loans."

real estate agents are very busy

"hurry up and edit various wechat messages and send them to the clients to tell them the good news." at a real estate agency in luohu, shenzhen, all real estate agency managers are very "busy". "just this morning, i received more than a dozen calls from my regular clients, all of whom were asking about the details of the relevant policies, especially some of the clients who wanted to upgrade their homes. during the mid-autumn festival that just passed, the market transaction volume was actually lower than expected, and buyers still have many concerns. the market needs more policies to support the 'golden september and silver october'," said a real estate agency manager.

as for real estate developers, the reporter found in previous interviews that their enthusiasm for launching new projects seems to be lower than expected, and some projects have not even launched corresponding marketing activities for the mid-autumn festival. however, favorable policies such as reducing the interest rate of existing mortgage loans and the down payment ratio will stimulate upgrade customers, and many real estate marketing personnel said that they will launch new discounts for upgrade customers.

pan gongsheng, governor of the people's bank of china, said at the meeting that the deadlines of two real estate financial policy documents will be extended. previously, the people's bank of china and the financial regulatory bureau issued two phased policies, namely the 16 financial regulations and commercial property loans, extending the validity period of the two policies from december 31, 2024 to december 31, 2026. in addition, the people's bank of china will support the acquisition of existing land of real estate companies. on the basis of using some local government special bonds for land reserves, it is studied to allow policy banks and commercial banks to lend to support qualified enterprises to acquire land from real estate companies in a market-oriented manner, revitalize existing land, and ease the financial pressure of real estate companies. if necessary, the people's bank of china can provide policy support.

yan yuejin, deputy director of shanghai e-house real estate research institute, said that in the past, special bonds involving real estate and land were strictly controlled, but this year the support has been significantly increased. in fact, it is also a fiscal tool to digest the inventory of real estate companies and the revitalization of undeveloped land. it has a positive effect on real estate companies to reduce inventory and digest risky land projects.

however, li yujia also reminded that part of the developers' stock of land has been mortgaged and it is difficult to repay the debt, and part of it has hidden debts that are difficult to release. in addition, developers may not be willing to sell at very low prices. even if they want to sell, few entities enter the market to buy, on the one hand because there are cheap and well-located plots in the auction market. on the other hand, some of the original plots have supporting construction, commercial offices or self-holding. under the market conditions at the time, these planning requirements were affordable, but now it is difficult to afford, and it is more difficult to modify the plan.