Financial Services Association, November 8 (Reporter Cao Yunyi) Less than half a month after domestic mortgage interest rates entered the word “2,” mortgage interest rates have been lowered one after another in many places. Today, the Financial Services Association learned from several banks in Hangzhou that starting today, interest rates for new mortgages in Hangzhou will be implemented at 3%. Just yesterday, Nanjing, Suzhou and other banks also indicated that the minimum interest rate for a first home loan was raised from 2.95% to 3.0%.

Industry insiders said that the reason for raising interest rates on first home loans is an inversion between interest rates on provident fund loans and mortgage interest rates, but there is no need to understand that the policy is being tightened; buyers should pay due attention to some changes in the market.

Lower interest rate limits for first home loans have been raised in many places

“We were notified yesterday afternoon that the interest rate for the first home loan will be 3.0% starting today, compared to 2.9% before the adjustment.” The mortgage manager of a major state-owned bank in Hangzhou told the Financial Federation reporter.

Since the LPR (loan market quoted interest rate) fell by 25 basis points (BP) in October, domestic mortgage interest rates have generally entered the “2” mark, and interest rates have even been as low as 2.65%, but it is less than half a month since breaking “3,” and cities have joined the army to lower mortgage interest rates one after another, including regions such as Hangzhou, Nanjing, and Suzhou.

“Starting Wednesday, the interest rate for the first home loan was reduced by 3.6% by 60 bps, and raised from 2.95% to 3%. If you haven't made a loan, then it's calculated at the new interest rate, and all banks in the city implement uniform standards.” The mortgage manager of a major state-owned bank in Suzhou told the Financial Federation reporter.

A Financial Services Association reporter confirmed from various banks such as Nanjing and Suzhou that the minimum interest rate for a first home loan was raised from 2.95% to 3.0%, and there is a possibility that it will rise in the future. A personal loan manager at a joint stock bank in Nanjing said that the minimum interest rate of 3.0% is uniformly implemented by Jiangsu Province.

Prior to that, after the LPR was cut by 25 basis points on October 21, the LPR for a term of 5 years or more was 3.60%. The mortgage interest rate in Nanjing declined as the LPR was lowered, and the interest rate for the first home loan was 2.95%. “After I signed the mortgage contract, I received a notice from the bank requesting a bp increase. The interest rate was still 2.95% when the materials were submitted; today I was notified that it would be changed to 3.0%.” Wu Wei (pseudonym), a buyer from Nanjing, said.

“We were notified of an adjustment to 3.0% on Tuesday night, and it will be implemented immediately the next day. Recently, they have been working overtime to approve and communicate with customers to inform them to amend their contracts.” The loan manager of a commercial bank in a city in Nanjing said, “We also received a notice saying that we can disburse as much money as possible as soon as possible, and that it will be adjusted to 3.05% at any time in the future.”

The increase in mortgage interest rates may be related to the inversion of the Provident Fund

Industry insiders believe that under the current trend of stabilizing the property market, some cities have raised the lower limit of mortgage interest rates, and this practice has certain weather vane significance.

Yan Yuejin, deputy director of the Shanghai Yiju Real Estate Research Institute, told the Finance Association reporter that the current increase should be understood as “mortgage interest rates have basically bottomed out,” but it cannot be understood as a tightening of the mortgage interest rate policy. “The current increase is due to an inversion between interest rates on provident fund loans and interest rates on mortgages. It is also related to the LPR reduction of 25 basis points. Therefore, the rise in commercial loan interest rates is related to such factors, but it cannot be understood as a tightening of policies.”

Regarding the phenomenon of commercial loan interest rates being inverted with interest rates on provident funds, Liu Lu, an economics professor at Southwest University of Finance and Economics, believes that there needs to be a certain gap between commercial loan interest rates and provident fund interest rates; this determines the positioning of housing provident funds. “Provident fund loans have inclusive financial attributes and play an important role in promoting the stability of the housing market and reducing the burden on buyers. In order for housing provident fund loans to play a stable role in stabilizing the property market over a long period of time, it is necessary to maintain interest spreads with commercial loans.”

Some experts also pointed out that it is more likely that interest rates on provident fund loans will be lowered in the future. Li Yujia, chief researcher at the Guangdong Housing Policy Research Center, said that lowering interest rates on provident fund loans can widen interest spreads with commercial loans, give full play to the security advantages of provident fund loans, and maintain support for lower-income workers' housing purchase needs. “We must maintain a gap of at least one percentage point with commercial loan interest rates.

Yan Yuejin believes that buyers should pay due attention to some market changes, such as the suspension of the housing purchase subsidy policy in Lanxi, Zhejiang, and the increase in mortgage interest rates in Guangzhou. The meaning is that the current policy is at the most relaxed stage, and buyers also need to make full use of the policies and actively enter the market to get hard-won policy support.