late night bombshell! four financial policies to support real estate are introduced, a quick overview in one article
2024-09-30
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on september 29, the people's bank of china and the state administration of financial supervision issued four financial support real estate policies:
1. announcement of the people's bank of china on improving the interest rate pricing mechanism for commercial personal housing loans
·when borrowers apply for commercial personal housing loans, they can choose fixed interest rates or floating interest rates as the pricing method. if the contract stipulates a fixed interest rate, the interest rate level will remain unchanged during the contract period. if the contract stipulates a floating interest rate, the interest rate will be formed based on the loan market quotation rate in the most recent month as the pricing basis and plus points (the plus points can be negative values). the range of the plus points should reflect factors such as market supply and demand, borrower risk premium, etc.· fixed-rate commercial personal housing loan borrowers can negotiate with banking financial institutions, and the banking financial institutions will issue new floating-rate commercial personal housing loans to replace existing loans. at the time of replacement, the interest rate is formed based on the loan market quote interest rate in the most recent month and points are added as the pricing basis. the point addition range is equal to the difference between the original contract interest rate and the loan market quote interest rate in the most recent month.· starting from november 1, 2024, if the contract stipulates a floating interest rate, commercial personal housing loan borrowers can negotiate with banking financial institutions to agree on a repricing cycle. on the interest rate repricing date, the pricing basis is adjusted to the loan market quoted interest rate in the most recent month. the interest rate repricing cycle and adjustment method should be specified in the loan contract.· starting from november 1, 2024, when the interest rate of floating-rate commercial personal housing loans deviates from that of newly issued commercial personal housing loans nationwide to a certain extent, the borrower can negotiate with the banking financial institution, and the banking financial institution will issue a new loan. floating rate commercial personal housing loans replace existing loans. the re-agreed point increase range should reflect changes in market supply and demand, borrower risk premium and other factors, and the point increase range should not be lower than the lower limit (if any) of the interest rate increase point for commercial personal housing loans in the city where the loan was replaced.
2. notice of the people’s bank of china and the state administration of financial supervision on optimizing the minimum down payment ratio policy for personal housing loans
·for households purchasing a house with a loan, commercial personal housing loans no longer distinguish between first and second homes, and the minimum down payment ratio is unified to no less than 15%.
3. notice of the general office of the people's bank of china on optimizing relevant requirements for affordable housing refinancing
·adjust and optimize matters related to refinancing of affordable housing. for qualified loans issued by financial institutions, the proportion of re-loans issued by the people's bank of china to financial institutions will be increased from 60% to 100% of the loan principal.
4. notice of the people’s bank of china and the state administration of financial supervision on extending the period of some real estate financial policies
·the applicable period of the reasonable extension policy to support existing financing such as development loans and trust loans in the "notice of the people's bank of china and the china banking and insurance regulatory commission on doing a good job in current financial support for the stable and healthy development of the real estate market" has been extended to december 31, 2026. .·if the relevant policies in the "notice of the general office of the people's bank of china and the general office of the state financial supervision and administration on effective management of commercial property loans" have an applicable period, the applicable period will be extended to december 31, 2026.
(this article comes from china business news)
