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"the implementation of the policy should not be too slow. we expect that our bank will follow up with some plans before the end of the month." a relevant person in charge of the personal loan department of a joint-stock bank's head office revealed to a reporter from china securities journal.

"customers are waiting. at least before national day, we have to hold an internal meeting to finalize a response plan for lowering the interest rates on existing mortgage loans, otherwise we won't be able to spend the holiday in peace." said the above person in charge.

on the morning of september 24, pan gongsheng, governor of the people's bank of china, announced at a press conference held by the state council information office that the people's bank of china intends to guide banks to make batch adjustments to existing mortgage interest rates. subsequently, the reporter visited and called several banks and learned that all banks are currently actively studying implementation plans.

the pace of implementation is expected to accelerate

pan gongsheng said that the people's bank of china plans to guide banks to make batch adjustments to the interest rates on existing mortgage loans, lowering the interest rates on existing mortgage loans to near the interest rates on newly issued loans, with an average decline expected to be around 0.5 percentage points.

the reporter visited and called several banks on the 24th and learned that some banks are actively studying implementation plans.

a personal loan specialist at the beijing branch of china construction bank told reporters, "it is certain to fall, but we still need to wait for specific notification on when and how to fall. we are still waiting for the head office to formulate detailed rules and specific implementation standards, and it is expected that the pace of implementation will be accelerated."

regarding the extent of this reduction, the commissioner also told reporters, "the regulatory authorities have announced a nationwide overall arrangement, but there may be some differences in specific regions, especially in large cities such as beijing, shanghai, guangzhou and shenzhen."

an employee of icbc's personal loan business department also told reporters, "our bank is currently actively studying relevant plans and specific operating details. after receiving the official documents from the regulatory authorities, we will implement them in an orderly manner as soon as possible in accordance with the law. later, our bank will publish specific operating guidelines through the official website, wechat official account and other channels."

in addition to the large state-owned banks, a number of joint-stock banks have also stated that they have paid attention to the relevant information and are actively promoting the implementation of the policy.

a personal loan account manager at china merchants bank said, "our bank is closely following relevant policy information. we still have to wait for the specific policies of the regulatory authorities to be implemented. we will issue a unified notice at that time. for some customers with special circumstances, we will also notify them personally as we did last year."

further reduce interest expenses

the reduction in interest rates on existing mortgage loans will help further reduce borrowers' mortgage interest expenses.

mr. shui, an owner in nanshan district, shenzhen, told reporters, "i applied for a mortgage loan in january 2020, with a loan of more than 2.6 million yuan. although there have been multiple favorable factors last year, such as the adjustment of the interest rate on existing mortgages and the conversion of second mortgages to first mortgages, the current interest rate is still 4.5%, which is more than 1 percentage point higher than the first mortgage rate currently implemented in shenzhen."

he believes that if the interest rate on existing mortgage loans can be reduced to around the current interest rate on new loans in shenzhen, the total interest on his unpaid mortgage could be reduced by nearly 400,000 yuan.

pan gongsheng said that this policy is expected to benefit 50 million households and 150 million people, and reduce the total interest expenditure of households by about 150 billion yuan on average each year.

in addition, the people's bank of china announced that in order to better support the rigid and diversified housing improvement needs of urban and rural residents, commercial personal housing loans at the national level will no longer distinguish between first and second sets of housing, and the minimum down payment ratio will be unified at 15%. local governments can formulate policies based on their cities and independently determine whether to adopt differentiated arrangements and determine the minimum down payment ratio within their jurisdiction. commercial banks will negotiate with customers to determine the specific down payment ratio level based on their risk status and willingness.

bringing multiple benefits

li yujia, chief researcher of the housing policy research center of the guangdong provincial urban planning institute, told reporters that after the policy is released, it is expected that early loan repayments will be significantly alleviated, and it can also crack down on illegal mortgage replacement behaviors such as bypassing business loans and consumer loans, which will help further promote consumption.

dong ximiao, chief researcher at china unionpay, analyzed that the people's bank of china's efforts to reduce the interest rates on existing mortgage loans and unify the minimum down payment ratio for mortgages will boost residents' housing consumption demand.

"the real estate market is related to many upstream and downstream industries, and its healthy and stable development is of great significance to the economic recovery. promoting a virtuous cycle between finance and real estate is not only a need for the healthy and stable development of the real estate market, but also a need to prevent and resolve financial risks." dong ximiao said.