four financial support real estate policies were announced, and existing mortgage interest rates will be reduced in batches before october 31.
2024-09-30
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on the evening of the 29th, the people's bank of china, together with the state administration of financial supervision, issued four financial support real estate policies, including improving the interest rate pricing mechanism for commercial personal housing loans, optimizing the minimum down payment ratio for personal housing loans, optimizing re-loans for affordable housing, and extending some real estate finance policy period.
at the same time, the market interest rate pricing self-regulatory mechanism issued an initiative, clarifying that in principle, commercial banks should carry out batch adjustments on eligible existing mortgage loans before october 31 this year, and reduce the interest rates of existing mortgage loans with higher interest rates to close to the national new mortgage interest rates. , allowing borrowers to benefit as early as possible.
most borrowers can operate with one click
according to the initiative issued by the market interest rate pricing self-regulatory mechanism, all commercial banks will add a point higher than -30 basis points to the loan market quoted interest rate (lpr) for existing mortgage interest rates, and uniformly adjust them to the loan market quoted interest rate (lpr) -30 basis points, and it should not be lower than the minimum point increase limit for new mortgage loans currently implemented in the city where you are located (if any). according to previous news released by the people's bank of china, this round of adjustments will guide commercial banks to lower existing mortgage interest rates to near the interest rates of new mortgage loans. the average decrease is expected to be approximately 0.5 percentage points.
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.
the initiative states that the vast majority of borrowers can complete "one-click operations" through online banking, mobile banking and other channels without going to a commercial bank branch. for details, please pay attention to the relevant information released by the official platform of the lending commercial bank in a timely manner.
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.
the people's bank of china also issued an announcement stating that for households taking loans to purchase houses, commercial personal housing loans will no longer distinguish between first and second houses, and the minimum down payment ratio will be unified to no less than 15%.
saving more than 100,000 yuan in interest over 30 years on a million-dollar mortgage
many mortgage loan owners are concerned about how low the interest rates will be after the batch adjustment of deposit and mortgage interest rates. bank 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 loan interest rate.
according to data from the people's bank of china, as of the end of july, the weighted average interest rate of all existing mortgage loans was approximately 4.06%. calculated based on the current lpr of 3.85%, according to the initiative, the interest rate of existing mortgage loans will be reduced to approximately 3.55% after batch adjustments. the interest rate will decrease by approximately 0.5 percentage points from the 4.06% before adjustment. this expected decrease is an average value and is specific to each contract. will vary. the interest rate level of 3.55% is also slightly lower than the national new loan interest rate level in the first eight months of this year (3.61%).
the reporter did some calculations and found that taking an existing mortgage with a term of 1 million yuan, 30 years, and equal principal and interest repayments as an example, assuming that the mortgage interest rate is reduced from 4.06% to 3.55%, the borrower's interest expense can be reduced by more than 100,000 yuan, saving every year. about 3,485 yuan, the monthly payment is about 290 yuan less.
the people's bank of china previously stated that after the batch adjustment is completed, it is expected that this policy will benefit 50 million households and 150 million people, and save 150 billion yuan per year for households with existing mortgage loans.
promote the real estate market to stop falling and stabilize
the announcement issued by the people's bank of china last night 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 will you can negotiate with the bank and apply to lower the existing mortgage interest rate to a level close to the new mortgage interest rate.
wang qing, chief macro analyst of oriental jincheng, believes that the policy to lower the existing mortgage interest rates was implemented quickly, exceeding market expectations, and covering the existing first-home and second-home loan interest rates. last year, the first round of existing mortgage interest rate reductions only covered the existing first-home loan interest rates. in comparison, the scope this time has been expanded.
industry 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 the people's bank of china has lowered the deposit reserve ratio by 0.5 percentage points and the policy interest rate by 0.2 percentage points, saving bank liability costs, improving banks' sustainable operating capabilities, and providing necessary support for banks to better support the real economy. 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.
the people's bank of china announcement also removed the restriction on the minimum one-year re-pricing cycle for mortgage interest rates. for newly signed personal housing loan contracts, starting from november 1, the borrower and the borrower can independently negotiate the repricing cycle. the repricing cycle can be yearly, half-yearly, or quarterly.
wang qing analyzed that after this round of policy adjustments, the linkage between existing mortgage interest rates and new mortgage interest rates will be further enhanced, eliminating the need to repay mortgage loans in advance due to the interest rate difference between new and old mortgage loans, and will further alleviate potential early repayments. the wave of loans will help promote the real estate market to stop falling and stabilize as soon as possible to avoid affecting residents' consumption.
