How to adjust the interest rate of existing housing loans? How much discount can we offer? Latest interpretation: Can you save 300000 interest? Multiple central bank branches issue notices

After the central bank and the State Administration of Financial Regulation clearly lowered the interest rates on existing first home loans, the details of the adjustments in various regions have attracted much attention.

On September 1st, several central bank branches in Beijing, Shanghai, Shenzhen, Tianjin, Changsha, Jilin Province, Henan Province, Fujian Province, Jiangxi Province, Gansu Province, Guangdong Province, and other regions announced the lower limit of interest rates for first-time home loans at different time periods, according to a report by a Chinese journalist from a securities firm. In addition, multiple banks have also issued announcements stating that they are preparing for the adjustment of interest rates on existing first-time home loans and are urgently formulating specific operational rules.

The adjustment of stock mortgage interest rates is related to every "mortgage borrower", how to adjust it? Who can make adjustments? How much discount can be offered after adjustment? These are all topics that everyone is concerned about.

According to Zhang Dawei, Chief Analyst of Zhongyuan Real Estate, the lower limit of the first home loan interest rate when most existing housing loans occur is the benchmark interest rate of 4.65%, and the highest current interest rate for homebuyers is about 6%, which means that with a loan of 1 million yuan for 30 years, the monthly supply can be reduced from 5995 yuan to about 5156 yuan per month, a decrease of about 840 yuan, which means that a 30-year loan can save 300000 yuan. The interest rates for most existing housing loans are now 5% -5.5%, which is a 30-50 basis point decrease compared to the benchmark interest rate of 4.65% in the previous year. This means that a loan of 1 million yuan for 30 years can reduce monthly payments by about 200 yuan, which means a 30-year loan can save 70000 yuan.

Industry insiders predict that the reduction of interest rates on existing housing loans may accelerate, which will help unleash the consumption potential of residents.

Multiple central bank branches issued a notice simultaneously

On September 1st, a Chinese journalist from a securities firm learned from the official website of the Beijing branch of the People's Bank of China that the self regulatory mechanism for market interest rate pricing in the Beijing region has released a public notice stating that from October 2019 to present, the lower limit of the interest rate for the first commercial personal housing loan in the Beijing region is the loan market quoted interest rate for the corresponding period+55 BP. The minimum interest rate for the first commercial personal housing loan in China is LPR from October 2019 to May 2022, and LPR-20 BP from May 2022 to present.

On the same day, the Shanghai headquarters of the People's Bank of China also released the self-discipline lower limit of interest rates for the first commercial personal housing loan in Shanghai. From July 24, 2021 to present, the lower limit level of interest rates implemented in Shanghai is LPR+35BP.

The Shenzhen branch of the People's Bank of China also publicly announced the historical adjustment of the lower limit of interest rates for first home loans in Shenzhen. From May 15, 2022 to present, the minimum level of interest rates implemented in Shenzhen is LPR+30BP.

The Tianjin Branch of the People's Bank of China has also announced the lower limit of the interest rate policy for commercial personal housing loans for the first set of housing in Tianjin: from October 2019 to May 2022, it is not lower than the corresponding market quoted interest rate for loans, which is consistent with the national lower limit; From May 2022 to October 2022, the market quoted interest rate for loans with a corresponding term shall be reduced by 20 basis points, consistent with the national lower limit; From October 2022 to present, the market quoted interest rate for loans with a corresponding term has been reduced by 40 basis points, which is 20 basis points lower than the national lower limit.

Subsequently, multiple provinces and cities including Yunnan, Zhejiang, Shandong, Anhui, Jilin, Hunan, Henan, Fujian, Jiangxi, Gansu, Guangdong, etc. also announced the lower limit of interest rates for first-time home loans at different time periods.

How to adjust it? How much discount can we offer?

The reason why many regions have announced the lower limit of interest rates for first home loans at different time periods is because the central bank and the State Administration of Financial Supervision have clearly defined that the object of this adjustment of interest rates for existing housing loans is first home loans, and there are clear requirements for the adjusted interest rates, that is, "the increase in the quoted interest rate in the loan market shall not be lower than the lower limit of the policy for commercial personal housing loan interest rates for first home loans in the city where the original loan was issued.".

So everyone is concerned about how much their mortgage interest rate can be lowered, and first of all, it is necessary to clarify the first home loan interest rate policy when the mortgage was issued that year.

For example, Beijing has announced that from October 2019 to present, the minimum interest rate for the first home loan in the Beijing area is LPR+55 BP. If the actual loan interest rate issued by the lending bank after October 2019 is increased by more than 55 BP, it can be negotiated with the lending bank to reduce it to a minimum of 55 BP.

If it is a home purchase loan before October 2019, for example, Shanghai has announced that the minimum interest rate for the first home loan from March 26, 2016 to October 7, 2019 is 10% off the benchmark interest rate; Shenzhen had a benchmark interest rate of 0.7 times before July 13, 2016, 0.9 times from July 13, 2016 to May 25, 2017, and 0.95 times from May 26, 2017 to October 7, 2019. In response to this situation, some industry insiders have pointed out that housing loans before 2019 are quite complex. During the LPR reform in 2019, banks and homebuyers re signed contracts to convert the previous loan interest rates into LPR plus a fixed number of points. Now, it is also necessary to re convert them. This is also why central bank branches in various regions now release lower limit interest rate tables for different time periods.

The industry insiders mentioned above also pointed out that if the interest rate offered by the bank was set according to the lower limit level of the local policy at that time, it cannot be adjusted this time because the lower limit discount has already been enjoyed before.

However, the specific amount of interest rate adjustment for existing housing loans still needs to wait for further policy details from commercial banks in various regions.

The People's Bank of China and the State Administration of Financial Regulation have clarified that there are two ways to adjust the interest rate of existing first-time home loans. Firstly, the borrower can apply for a new loan issued by a commercial bank to replace the existing first-time home loan, and the new loan interest rate will be determined through independent negotiation between the two parties; The second is for the borrower to negotiate with the commercial bank to change the contract and agree on a new loan interest rate.

Zhang Dawei believes that the lower limit of the national first home commercial loan interest rate has been adjusted to no less than 20 basis points lower than the LPR. Since the central bank and the former China Banking and Insurance Regulatory Commission announced the establishment of a dynamic adjustment mechanism for the first home loan interest rate policy on January 5th, many regions have lowered the first home loan interest rate to below 4%, entering the era of "breaking through the 4 in 3" policy, with the lowest first home loan interest rate reaching 3.6%. In the past few years, the lower limit of the first home loan interest rate policy has mostly been the LPR at that time. Overall, for homebuyers with existing mortgage loans, especially those who often pay high interest rates of 5% -6%, it is likely that the mortgage can be reduced by more than 100 basis points. However, the specific impact still needs to be negotiated between homebuyers and banks.

Multiple bank announcements

Recently, several banks have announced that they are preparing for the adjustment of interest rates on existing first-time home loans.

On September 1st, Zhengzhou Bank issued a notice on matters related to reducing the interest rate of first-time housing loans, stating that it will actively implement the requirements of the Notice of the People's Bank of China and the State Administration of Financial Supervision on Matters Related to Lowering the Interest Rate of First Time Housing Loans, and carry out preparations for adjusting the interest rate of first-time personal housing loans in accordance with the law and in an orderly manner. We will provide convenient services through multiple channels in accordance with the principles of marketization and rule of law, carry out interest rate adjustment work in accordance with laws and regulations, and effectively play the role of finance in supporting the recovery and expansion of consumption, ensuring and improving people's livelihoods, and other fields.

On August 31st, several banks including Agricultural Bank of China, Construction Bank of China, Postal Savings Bank of China, and China Merchants Bank have issued a notice on adjusting the interest rates of existing first-time home loans, stating that they are preparing to adjust the interest rates of existing first-time home loans and are working hard to formulate specific operational rules.

Among them, Agricultural Bank of China stated that, under the guidance of relevant departments, it is actively and orderly preparing for the adjustment of interest rates for first-time personal housing loans in accordance with the law. Agricultural Bank of China will provide convenient services through online and offline channels in accordance with the principles of marketization and rule of law, and carry out interest rate adjustment work in accordance with the law and regulations.

China Construction Bank stated that it will, under the guidance of relevant departments, promptly formulate specific operational rules and carry out interest rate adjustment work as soon as possible. Postal Savings Bank of China also stated that it is actively preparing for the adjustment of interest rates on existing first-time home loans and has been working hard to formulate operational rules. China Merchants Bank also stated that, under the guidance of relevant departments, it is urgently formulating specific operational rules and carrying out interest rate adjustment work as soon as possible.

Zhongzhi Research Institute predicts that the reduction of interest rates on existing housing loans may accelerate, and the reduction of interest rates on existing housing loans will help unleash the consumption potential of residents.