Major commercial banks such as industrial and commercial bank of china, agricultural bank of china, bank of china, china construction bank, bank of communications, and postal savings bank of china adjusted the interest rates of existing housing loans in batches today, and it is expected that some small and medium-sized banks will complete this adjustment by the end of the month at the latest. Recently, under the combination of real estate support policies, the real estate market has shown certain signs of bottoming out, and the phenomenon of early repayment of loans has been alleviated.
Caifinance News on October 25th (Reporter Si Sitong): On October 25th, the industrial and commercial bank of china, agricultural bank of china, bank of china, china construction bank, bank of communications, and postal savings bank of china, and other major commercial banks, centralized and adjusted the interest rates of existing housing loans that meet the conditions, uniformly reduced to LPR-30BP. It is understood that after this adjustment, the average interest rate of existing housing loans is expected to decrease by around 0.5 percentage points, saving a total of about 150 billion yuan in interest payments, benefiting 50 million households, and 0.15 billion residents.
In the view of industry experts, the implementation of the policy to reduce the interest rates of existing housing loans this time will have a series of positive impacts on the macro economy, including effectively boosting market confidence, providing strong support for consumption and investment, and helping the real estate market to bottom out and stabilize. Under the recent combination of various policies, certain signs of bottoming out in the real estate market have emerged, and the phenomenon of early repayment by banks has also significantly decreased.
Most of the existing housing loans will be adjusted today, saving a total of approximately 150 billion yuan in interest payments.
Caifinance News learned from relevant commercial banks that starting from today, most of the existing housing loans will be collectively adjusted. Borrowers can check the results of the interest rate adjustment through the designated channels of the loan banks. The time for some small and medium-sized banks to complete the adjustment may be slightly later, and overall completion is expected by the end of October 31st.
"This adjustment measure was actively implemented by the relevant banks in response to the announcement by the People's Bank of China on September 29 and the initiative of the market interest rate pricing self-discipline mechanism." Experts pointed out that compared to the first adjustment in August last year, the rules related to this adjustment are clarified through self-discipline initiatives, further deepening the market-oriented interest rate reform from an institutional level, while maintaining the seriousness of contracts.
It is reported that this adjustment is uniformly operated by the banks, and the vast majority of borrowers do not need to go to the bank branches or actively operate on online banking. The markup on the interest rate of existing housing loans based on LPR will be adjusted to -30BP, and the average interest rate of existing housing loans is expected to decrease by around 0.5 percentage points. Overall, it will save borrowers about 150 billion yuan in interest payments, benefiting 50 million households and 0.15 billion people.
Caifinance News reporters found that Mr. Zhang, who serves as the Deputy General Manager at a high-tech park in Beijing, for example, purchased a second home in September 2022. The loan interest rate was LPR+105BP. When the national uniform adjustment of housing loan interest rates took place in September last year, it was reduced to LPR+55BP, and the loan interest rate dropped from 5.25% to 4.75%. After this latest adjustment, the housing loan interest rate will decrease by another 85BP.
"According to the calculation of the industrial and commercial bank customer manager, my loan balance is 2.7 million, the remaining loan term is 25 years, the adjusted monthly repayment amount is reduced by about 2000 yuan, and the total amount of interest to be repaid later is more than 400,000 yuan less than before adjustment." Mr. Zhang expressed joy, stating that this adjustment has significantly reduced the family's housing loan expenses, and the saved interest can be used to improve the quality of life and increase investment in children's education.
The phenomenon of early repayment of loans is easing, and signs of stabilizing the real estate market are gradually emerging.
Experts believe that the implementation of the policy to lower existing house loan interest rates will have a series of positive impacts on the macroeconomy, including effectively boosting market confidence, supporting consumption and investment, as well as helping stabilize the real estate market.
On one hand, against the background of slowing economic growth and household income growth, high housing loan burdens have become a major source of pressure for many families. This policy adjustment is a positive response to public concerns. Meanwhile, at the critical point of the implementation of the existing house loan interest rate adjustment policy, the capital markets have also reacted positively.
On the other hand, for specific individuals and families, the reduction in mortgage interest brings tangible increases in income, which can alleviate expenditure pressure and enhance consumer confidence. For individual businesses, the lower cost of loans can provide more abundant cash flow for operations, and the saved funds are beneficial for promoting business expansion.
For example, for a borrower purchasing a house in Peking, with a loan amount of 1 million yuan and a term of 25 years, the equal principal and interest house loan interest rate is 4.4%. After the interest rate adjustment, it becomes 3.55%, saving 469 yuan in monthly payments, totaling over 140,000 yuan saved in interest. Taking into account the cumulative 0.6 percentage point decrease in the benchmark lending rate (LPR) for over 5 years this year, the reduction in mortgage interest rates after adjusting to the LPR can reach 1.45 percentage points, leading to even more savings in interest.
Meanwhile, after the decrease in existing house loan interest rates, concerns about the widening gap between new and old house loan interest rates have eased, helping to release rigid housing demand and supporting the stable and healthy development of the real estate market. Experts state, "Recent real estate support policy combinations have boosted residents' expectations for home purchases, coupled with proactive implementation of differentiated policies by local governments, the real estate market is showing signs of bottoming out and stabilizing."
In fact, following the introduction of policies such as reducing existing house loan interest rates in the real estate sector, recently, there has been a noticeable increase in the number of viewings and transactions for new and second-hand houses in top-tier cities like Peking. At the same time, according to a reporter from Cailian News, a major bank has seen a 20% decrease in early repayments of house loans since October compared to the period before the policy was introduced in September.
