On September 24, the State Council Information Office held a press conference and launched a number of important policies at the same time. Pan Gongsheng, governor of the People’s Bank of China, introduced that the interest rate of existing mortgages will drop by an average of 0.5%, and the minimum down payment ratio for the second set of houses will be adjusted to 15%, unifying the minimum down payment ratio for the first and second sets of houses.
After the policy adjustment, the interest of a 1 million yuan 30-year commercial loan will be reduced by 300 yuan to 400 yuan per month, and the interest is expected to be reduced by nearly 100,000 yuan. A staff member of China Construction Bank told reporters that they have not received the adjustment document notification from China Construction Bank for the time being, and generally the adjustment will be made in batches directly, and it is expected that it will not take too long.
The interest rate of existing mortgages will drop by an average of 0.5%
A loan of 1 million yuan will save 300 yuan to 400 yuan per month
Previously, the most popular topic in the market was to lower the interest rate of existing mortgages. Pan Gongsheng, governor of the People’s Bank of China, said that commercial banks will be guided to lower the interest rate of existing mortgages to near the interest rate of new mortgages, and the average reduction is expected to be about 0.5 percentage points.
Ms. Zhang, who lives in Tianfu New District, Chengdu, bought a commercial house at the end of 2021. At that time, the interest rate was as high as 6.125%. The high monthly repayment pressure gave Ms. Zhang a headache, and she has been raising funds to prepare for early repayment. Now Ms. Zhang has calculated that after a 50 basis point drop, she can save 300-400 yuan per month on her 1 million yuan, 30-year loan, and the monthly repayment pressure is reduced to less than 5,000 yuan, and the interest in 30 years is reduced to nearly 100,000 yuan. Ms. Zhang said that the owners in the same community were very happy to see the news, and they calculated how much they could save every month.
Pan Gongsheng said that this policy will benefit 50 million households and 150 million people, and reduce household interest expenditure by about 150 billion yuan per year on average. When will banks in various places follow the central bank’s policy? The reporter consulted the staff of China Construction Bank, who replied to the reporter, “Since this morning, we have received one consultation call after another, but we have not received any document notification from CCB yet. We need to wait for notification on how to adjust and how much to adjust.” However, the staff said that they will quickly follow up on the policy, and generally adjust it in batches directly, and it is expected that it will not take too long. China Merchants Bank, CITIC Bank and others said that they will issue a notice in due course during the follow-up policy.
The high interest rate of existing mortgage loans has always been the focus of attention of the majority of existing homeowners, and the call for lowering the interest rate of existing mortgage loans has also been growing. Liu Lu, an economist at Southwestern University of Finance and Economics, said that since the interest rate of existing mortgage loans involves the group that has already purchased a house, it will not have a direct impact on the real estate transaction market, but it will play a certain role in improving the confidence of the current homebuying group in the later stage of the market, and it will also be conducive to forming a combination of a series of real estate policies to release the market. At the same time, reducing the repayment pressure will help promote consumption and revitalize the economy.
The minimum down payment ratio for the second set of housing is 15%
Unify the minimum down payment ratio for the first and second sets of housing loans
In addition, the central bank announced that the minimum down payment ratio for the second set of housing loans at the national level will be reduced from 25% to 15%, and the minimum down payment ratio for the first and second sets of housing loans will be unified. Lin Sen, chief researcher of Cover Real Estate Think Tank and general manager of Sichuan Chanhecheng Enterprise Management Co., Ltd., said that if the down payment ratio for the second set of housing is reduced to 15%, the effect of improving demand release will be better, and consumers who want to improve their housing purchases can also reduce a lot of pressure. With the reduction of loan interest rates, housing demand may be further released.
“Reducing the down payment ratio for the second set of housing directly reduces the pressure of buying a house. In some first- and second-tier hot cities with rapid economic development and large population inflows, with the increase of multi-child families, one- or two-bedroom houses cannot meet the demand. This is a relatively rigid second set of improvement demand, which is not considered investment.” Liu Lu said that reducing the down payment ratio for the second set of housing is the country’s protection of various types of self-occupied housing purchase needs and is necessary to ensure the healthy development of the real estate market.
This round of down payment adjustment for second homes has reduced the down payment to the lowest level since 2000, directly unifying the down payment ratio for the first and second homes. “From the actual experience of real estate sales in Chengdu, the reduction in down payment ratio means that for many areas within the first ring road, a down payment of 75,000 yuan is enough to buy a home with a total price of 500,000 yuan, and the number of inquiries from second home buyers who focus on factors such as proximity to school districts and hospitals has increased.” Yin Li, a real estate agency staff member, said that many customers who want to buy retirement homes for their parents said that their pressure has been reduced after learning that the down payment ratio for the second home has been reduced. Liu Lu said that reducing the down payment ratio for the second home, in addition to expanding housing demand, also indicates that housing prices are currently at the bottom, and this policy can effectively accelerate the recovery of the market.