2024-09-30
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journalist: zhang shoulin editor: ma ziqing
on the evening of september 29, the people's bank of china issued the latest policy to improve the interest rate pricing mechanism for commercial personal housing loans and promote the reduction of existing housing loan interest rates. the central bank announced that it would allow changes in the percentage points added to mortgage interest rates based on lpr and remove the restriction on the minimum one-year repricing cycle of mortgage interest rates.
in addition, the market interest rate pricing self-regulatory mechanism will issue initiatives toguide commercial banks to carry out a batch adjustment of existing mortgage interest rates before october 31, 2024。
wang qing, chief macro analyst of oriental jincheng, pointed out that the current reduction in existing mortgage interest rates was implemented quickly and exceeded market expectations. this is a rapid implementation of the deployment of the political bureau meeting of the central committee on september 26, and releases two signals: one is to increase efforts to boost household consumption, and the other is to promote the real estate market to stop falling and stabilize.
on september 29, the relevant person in charge of the central bank pointed out in answering reporters’ questions on improving the interest rate pricing mechanism for commercial personal housing loans that with the continuous deepening of interest rate market-oriented reforms and major changes in the supply and demand relationship in the real estate market, the current housing loan interest rate pricing mechanism some shortcomings have also been exposed, and the people have reacted strongly, and there is an urgent need for adjustment and optimization.
according to the contract, the points added to the mortgage loan based on lpr are fixed during the contract period. mortgage contract terms are generally long, and the fixed point margin cannot reflect changes in borrower credit, market supply and demand and other factors. once the market situation changes, it is easy to cause the spread between new and old mortgages to widen. as the market-oriented reform of interest rates continues to deepen, it is necessary to optimize the system design and promote commercial banks and borrowers to change their contracts in an appropriate manner. the person in charge said, “in august 2023, in order to fully respond to the demands of the masses and based on the principle of urgency, the central bank, together with the state administration of financial supervision, guided commercial banks to adjust existing mortgage interest rates in batches by negotiating changes to contract interest rates and other methods, and achieved better results. effect."
he pointed out,since the point increase rate under the current mortgage interest rate pricing mechanism cannot be adjusted independently, the contradiction between the interest rates of new and old mortgages has accumulated and expanded again recently.. commercial banks will coordinate through industry self-discipline to carry out another batch adjustment of eligible existing housing loans, lowering the interest rate to around the national new housing loan interest rate. however, the above-mentioned methods treat the symptoms rather than the root cause. to fundamentally solve the problem of interest rate differentials between new and old mortgages, we need to deepen the market-oriented reform of interest rates, while maintaining the seriousness of contracts, break down institutional obstacles, and promote market-based approaches for both commercial banks and borrowers. the principle of independent negotiation and dynamic adjustment.
the reporter noticed that the state council information office held a press conference on september 24, 2024. at the press conference, central bank governor pan gongsheng announced three major "policy packages": first, to reduce the deposit reserve ratio and policy interest rate, and drive the market benchmark interest rate downward; second, to reduce the existing mortgage interest rate and unify the minimum mortgage rate. down payment ratio; third, create new monetary policy tools to support the stable development of the stock market.
in terms of lowering existing mortgage interest rates and unifying the minimum down payment ratio for mortgage loans, pan gongsheng introduced that commercial banks will be guided to lower existing mortgage interest rates to near the new loan interest rates. the average decrease is expected to be about 0.5 percentage points; unify mortgage loans for first and second homes. the minimum down payment ratio will be lowered from the current 25% to 15% for second-home loans at the national level; the 300 billion yuan affordable housing created by the people's bank of china in may will be re-financed, and the support ratio of central bank funds will be reduced from the original 60 % to 100% to enhance market-based incentives for banks and acquisition entities; the two policy documents of operating property loans and the "financial 16" due before the end of the year will be extended to the end of 2026.
pan gongsheng pointed out that lowering existing mortgage interest rates will reduce banks’ interest income, but it will also reduce customers’ early repayments. the bank's lowering of existing mortgage interest rates will help further reduce borrowers' mortgage interest payments. it is expected that this policy will benefit 50 million households and 150 million people, reducing the total interest payments of households by about 150 billion yuan per year on average, which will help promote expanding consumption and investment will also help reduce early loan repayments. it can also reduce the space for illegal replacement of existing mortgage loans and protect thefinancial consumerlegitimate rights and interests and safeguard the stable and healthy development of the real estate market.
according to the central bank’s announcement, the main contents of the latest policy adjustments can be summarized as follows.
the first is to allow changes in the percentage points added to the mortgage interest rate based on the lpr.borrowers and borrowers can adjust the point addition range through negotiation, contract changes, etc. to more accurately reflect changes in market supply and demand, borrower risk premium and other factors. in the future, the market competition mechanism can encourage commercial banks to negotiate independently with borrowers and adjust the point increase range in a timely manner. there is no need to wait until the interest rate difference between new and old mortgages has accumulated to be large before commercial banks make batch adjustments. this can alleviate conflicts in a gradual and orderly manner and maintain contractual seriousness.
the second is to remove the restriction on the minimum one-year mortgage interest rate repricing cycle.starting from november 1, 2024, floating rate mortgages with newly signed contracts will be consistent with other floating rate loans except mortgages, and the repricing cycle can be determined by the borrower and the borrower through independent negotiation. eligible borrowers with existing mortgage loans can negotiate with commercial banks to adjust the point increase in mortgage interest rates and at the same time adjust the repricing cycle so that existing mortgage interest rates reflect changes in the pricing benchmark (lpr) in a timely manner and smooth the transmission of monetary policy.
in addition, the market interest rate pricing self-discipline mechanism will issue an initiative to guide commercial banks to carry out a batch adjustment of existing mortgage interest rates before october 31, 2024. commercial banks will issue relevant announcements and batch adjustment details to uniformly reduce the points added to mortgage interest rates based on lpr, and provide convenience to borrowers as much as possible. the vast majority of borrowers can complete the "one-click operation" 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. after the batch adjustment is completed, both parties can also independently negotiate and dynamically adjust the existing mortgage interest rates based on market-oriented principles in accordance with the announcement of the central bank.
on the evening of september 29th,the five major state-owned banks including icbc, agricultural bank of china, bank of china, china construction bank and bank of communications have issued announcements that they will adjust the interest rates of existing personal housing loans.. the above-mentioned banks all stated that they are advancing the reduction of existing commercial personal housing loan interest rates in an orderly manner in accordance with the law, and plan to release specific implementation details on october 12, 2024 through their respective official websites, official wechat public accounts, loan agencies and other channels. it is reported that all banks have announced that they will implement batch adjustments to existing mortgage interest rates before october 31, 2024.
wang qing, chief macro analyst of oriental jincheng, pointed out that this time the reduction in mortgage interest rates must be completed before october 31 and cover the interest rates on first and second home loans. last year, the first round of mortgage interest rate reductions only covered the interest rates on first home loans. this time the scope has been expanded. starting from november 1, customers can renegotiate the existing mortgage interest rate repricing cycle with their banks. it turns out it’s only once a year. this time it can be adjusted every quarter, every six months or every year.
wang qing said,the positive significance of this policy is to shorten the adjustment cycle of existing mortgage interest rates.. next, the linkage between existing mortgage interest rates and newly issued 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, which can further alleviate the potential "early repayment wave." 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.
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