Economy

What is the impact of the lower limit of the first mortgage interest rate?

2022-05-16   

On the 15th, the people's Bank of China and the China Banking and Insurance Regulatory Commission issued a notice to adjust the lower limit of commercial individual housing loan interest rate for the first set of housing. This is the first time that the lower limit of the first house loan interest rate has been lowered since the reform of the quoted interest rate in the loan market. On the same day, the people's Bank of China and the China Banking and Insurance Regulatory Commission issued a notice that for resident families who buy ordinary self owned houses with loans, the lower limit of the interest rate of commercial individual housing loans for the first set of houses is adjusted to not less than the market quotation interest rate (LPR) of loans for the corresponding period by 20 basis points, and the lower limit of the interest rate policy of commercial individual housing loans for the second set of houses is implemented in accordance with the current provisions. Before that, the lower limit of interest rate implemented at the national level was that the interest rate of the first house loan should not be lower than the LPR of the corresponding period, and the interest rate of the second house loan should not be lower than the LPR of the corresponding period plus 60 basis points. After the policy adjustment, the interest rate of the first house loan shall not be lower than 4.4% according to the calculation of LPR over 5 years released on April 20. The reporter learned that the policy adjustment is mainly aimed at the new issuance of commercial personal housing loans, and the interest rate of stock commercial personal housing loans is still implemented according to the original contract. In other words, if the lower limit of the city's policy and the specific implementation interest rate of the bank follow the national policy, the interest expenditure will be reduced when the resident family applies for a loan to buy the first ordinary self owned house. The regional characteristics of China's real estate market are obvious. The determination of individual housing loan interest rate and down payment ratio follows the principle of implementing policies according to the city, and adopts the three-tier pricing mechanism of the whole country, the city and the bank. However, in practice, most cities have directly adopted the national policy lower limit without additional requirements. After the national policy lower limit adjustment, will local policies be adjusted simultaneously? In fact, since March, due to the weakening market demand, the mortgage interest rate has experienced a wave of adjustment, mainly at the bank level. Zou LAN, director of the financial market department of the people's Bank of China, said that banks in more than 100 cities have independently lowered mortgage interest rates according to market changes and their own business conditions, with an average range of 20 to 60 basis points. At the same time, some provincial market interest rate pricing self-discipline mechanisms also cooperate with the regulatory requirements of local governments. According to the actual situation of the city and within the scope of national policies, the lower limit of down payment proportion and interest rate of the city have been lowered. "This is the differentiated and market-oriented adjustment made by the city government and banks according to the market situation and their own business strategies, which adapts to the characteristics of regional differences in the real estate market." Zou Lan said. Relevant data show that the current sales of commercial housing have declined, and the amount of individual housing loans has also fallen slightly. The newly released financial statistics show that household loans decreased by 217 billion yuan in April. Among them, housing loans decreased by 60.5 billion yuan. The notice clearly states that on the basis of the national unified lower limit of loan interest rate, the dispatched offices of the people's Bank of China and the China Banking and Insurance Regulatory Commission shall, in accordance with the principle of "implementing policies according to the city", guide the provincial market interest rate pricing self-discipline mechanism, and independently determine the lower limit of commercial individual housing loan interest rate for the first and second houses in the cities under their jurisdiction according to the changes in the real estate market situation of the cities under their jurisdiction and the regulation requirements of the urban government. Experts believe that on the basis of the lower limit of urban loan interest rate, banking financial institutions will reasonably determine the specific plus point value of each loan in combination with their own operation, customer risk status, credit conditions and other factors. The people's Bank of China said that the adjustment of housing loan policy aims to adhere to the positioning that houses are used for living rather than speculation, fully implement the long-term mechanism of real estate, support all localities to improve real estate policies based on local conditions, support rigid and improved housing demand, and promote the steady and healthy development of the real estate market. (Xinhua News Agency)

Edit:He Chuanning Responsible editor:Su Suiyue

Source:Xinhua

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