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today (september 29), the people's bank of china issued an announcement that it will guide existing mortgage interest rates to be reduced in batches. the market interest rate pricing self-discipline mechanism also issued an initiative to reduce existing mortgage interest rates in batches.

the people's bank of china will guide existing mortgage interest rates to be reduced in batches

the people's bank of china issued an announcement today to improve the interest rate pricing mechanism for commercial personal housing loans.

the self-regulatory mechanism for market interest rate pricing also issued an initiative. in principle, all commercial banks should carry out batch adjustments on eligible existing mortgage loans before october 31, 2024, and the points added to the loan market quotation rate (lpr) will be higher than -30 basis points. existing mortgage interest rates,unified adjustment to loan market quoted interest rate (lpr) -30 basis points.

wang qing, chief macro analyst of oriental jincheng, said that this adjustment has released two signals. the first isincrease efforts to boost household consumption, the second one ispromote the real estate market to stop falling and stabilize. this is equivalent to giving reassurance to households with existing mortgage loans, which will help promote the real estate market to stop falling and stabilize as soon as possible to avoid affecting residents' consumption.

when will the existing mortgage interest rate be adjusted? how to adjust?

so when will the existing mortgage interest rates be adjusted? which mortgages can be adjusted? how to make adjustments?

according to the "initiative" issued by the market interest rate pricing self-regulatory mechanism, it is clarified that all commercial banksbefore october 31, 2024, carry out batch adjustments to existing housing loans that meet the conditions,lower the existing mortgage interest rates with higher interest rates to close to the national new mortgage interest rates, allowing borrowers to benefit as soon as possible.

in the batch adjustment stage, existing mortgage loans for first, second and above homes can be adjusted.existing mortgage loans that have had their point markup adjusted last year are also included.

wang qing, chief macro analyst of oriental jincheng, said that this adjustment is in line with market expectations and covers existing first- and second-home loan interest rates. last year, the first round of existing home loan interest rates was lowered, which only covered existing first-home loan interest rates. this time the scope has been expanded. .

regarding the adjustment method, the initiative proposes that all commercial banks should complete preparatory work such as contract text changes and system transformation as soon as possible to ensure that the existing mortgage interest rate adjustment work is completed as scheduled. at present, many commercial banks have stated that they will issue specific operational announcements on october 12 to ensure that batch adjustments are completed as scheduled.

to what level can borrowers’ interest rates drop after batch adjustments?

to what level can borrowers’ interest rates drop after batch adjustments? industry insiders said that due to different repricing dates, the interest rates of different borrowers will differ after batch adjustments, but after the repricing date, the interest rates will drop to around the national new mortgage interest rates.

the "initiative on batch adjustment of existing mortgage interest rates" clarifies: during the batch adjustment stage, commercial banks will reduce the point increase rate for existing mortgage loans that is higher than -30 basis points on the loan prime rate (lpr) to -30 basis points, and not lower than -30 basis points. the city where you are located currently implements a minimum point limit for new mortgage loans. to put it simply, it is adjusted uniformly to the loan market quoted interest rate lpr-30 basis points.

existing mortgage interest rates are expected to fall by about 0.5 percentage points on average.

as of the end of july, the weighted average interest rate of all existing mortgage loans was approximately 4.06%. in the first eight months of this year, the national average interest rate for new mortgage loans was 3.61%.according to the initiative, the existing mortgage interest rates will be reduced to approximately 3.55% after batch adjustments.after the adjustment, the interest rate will drop by about 0.5 percentage points from the 4.06% before the adjustment. the drop is expected to be an average, and the specifics will be different for each contract.

dong ximiao, chief researcher of china merchants union, said that if we take into account the previous reduction of the central bank's policy interest rate by 0.2 percentage points, the loan prime rate (lpr) on october 21 may follow suit and drop by 0.2 percentage points. after the loan repricing, the adjusted existing mortgage interest rate level it will be significantly lower than 3.55%, falling to about 3.35%, and the mortgage interest rate of some borrowers will drop by more than 100 basis points, or 1 percentage point, which will significantly save the interest expenses of mortgage borrowers.

how much money can homebuyers save?

so, how much interest payments can home buyers save? we also calculated an account for everyone.

taking an existing mortgage loan of 1 million yuan with a term of 25 years and equal principal and interest repayments as an example, assuming that the mortgage interest rate drops from 4.4% to 3.55%.it can save the borrower's interest expenses by about 5,600 yuan per year.after the batch adjustment is completed, it is expected that this policy will benefit 50 million households with a population of 150 million, and save 150 billion yuan in expenditures for households with existing mortgage loans every year.

bank net interest margins are expected to remain basically stable

experts said that after this adjustment of existing mortgage loans, early repayments will be significantly reduced, which will also help banks stabilize loan scale and improve loan quality.

dong ximiao, chief researcher of china merchants union, said that considering that the people's bank of china lowered the deposit reserve ratio by 0.5 percentage points and the policy interest rate by 0.2 percentage points, it also saves bank liability costs, improves banks' sustainable operating capabilities, and provides the necessary resources for banks to better support the real economy. support. taking these policy measures into consideration, after the existing mortgage interest rates are adjusted, the bank's net interest margin is expected to remain basically stable.

central bank: establishing a long-term mechanism for adjusting existing mortgage interest rates

in addition, the announcement issued by the people's bank of china this time also established a long-term mechanism for the gradual and orderly adjustment of existing mortgage interest rates. if the interest rates of new mortgage loans continue to decline in the future, when the existing mortgage interest rates deviate from the national new mortgage interest rates to a certain extent. , the borrower can negotiate with the bank and apply to lower the existing mortgage interest rate to a level close to the new mortgage interest rate.

(cctv reporter zhu jihua and zhang daofeng)