Multiple banks have launched a "interest first, principal later" repayment model for mortgage loans


Against the backdrop of multiple underground adjustments in mortgage interest rates and reduced down payment ratios, some banks have launched fancy marketing strategies in mortgage loans. According to Securities Daily reporters, some banks have launched a free consumption voucher campaign for new homebuyers, while others have introduced a "new pattern" in mortgage repayment methods, offering interest first, principal later repayment methods. Yang Haiping, a researcher at the Securities and Futures Research Institute of Central University of Finance and Economics, told Securities Daily that multiple banks have launched preferential policies for housing loans and unique repayment methods, which is in response to the policies and supports the stabilization of the real estate industry; On the other hand, in the absence of sufficient demand for effective credit, mortgage loans remain relatively high-quality assets, and commercial banks actively seize mortgage loans as a priority direction for credit asset allocation. Recently, China Construction Bank Guangdong Huizhou Branch launched a housing loan exclusive activity, distributing consumption vouchers to homebuyers who purchase newly built commercial housing within the jurisdiction of Huizhou. The consumption vouchers applied for through the China Construction Bank Life App are in the form of digital RMB consumption red envelopes. The reporter learned that for those who purchase a house with a total price of less than 1 million yuan (excluding), they can apply for a 5000 yuan gift consumption voucher package (50 "discount of 100 yuan for more than 120 yuan" consumption vouchers); For those who spend more than 1 million yuan (inclusive), they can apply for a 10000 yuan gift consumption voucher package (100 vouchers with a discount of 100 yuan for those who spend more than 120 yuan). Guilin Bank has also launched preferential policies for housing loans. For example, a newly signed individual housing loan borrower (excluding commercial housing) can receive one personal housing loan interest coupon with a face value of 200 yuan (excluding commercial housing), one coupon with a face value of 100 yuan for quick loans, and one coupon with a total interest of 300 yuan per person for housing loans; The recommender who participates in the activity and recommends others to apply for the bank's personal first-hand or second-hand housing loan and completes the loan disbursement can receive a maximum of 800 yuan of WeChat reduction bonus to meet the standard. Tian Lihui, Dean of the Financial Development Research Institute of Nankai University, stated in an interview with Securities Daily that the introduction of preferential policies for housing loans by banks can stimulate demand for housing, reduce the burden of housing consumption on residents, and promote transaction activity in the real estate market; On the other hand, preferential policies may attract more loan demand, thereby increasing the volume of mortgage loan business for banks. In addition to introducing preferential policies for housing loans, many banks have begun to flexibly adjust the repayment methods for personal housing mortgages. For example, several banks such as Industrial and Commercial Bank of China and China Construction Bank have launched a "interest first, principal later" repayment model for mortgage loans. Previously, the common repayment methods were equal principal and interest and equal principal. "Interest first, principal later" means that individuals or families with tight cash flow in the short term can effectively alleviate monthly supply pressure. Zhou Yiqin, founder of Guantiao Consulting, told Securities Daily that the interest first repayment method is more suitable for customers who have tight initial funds but are expected to have more disposable funds in the future. However, the comprehensive financing cost of the interest first repayment method is relatively high, and customers still need to act within their capabilities. At the same time, commercial banks also need to accurately evaluate the financial condition and repayment ability of customers. It is widely believed in the industry that without a lower limit on mortgage interest rates, competition between banks becomes increasingly fierce. How to break through in the increasingly competitive loan market in a low interest rate environment is a problem that banks need to solve. Yang Haiping believes that mortgage loans are still a battleground for commercial banks. Expanding mortgage loans can to some extent form a funding loop with project loans, which is also one of the reasons why commercial banks actively expand real estate loans. "It is expected that banks will launch more innovative measures in the future to attract customers." Tian Lihui stated that banks will implement more segmented market strategies and provide differentiated services based on the characteristics of different markets and customer groups. With the development of financial technology, banks will use technologies such as big data and artificial intelligence to improve service efficiency and achieve more accurate credit risk assessment and pricing. (Lai Xin She)

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