Is there any looseness in the exchange of interest rates for existing housing loans? Local banks have already approved commercial to public transfer! What signal is being released? Provident Fund | Loan | Local
The business of converting commercial loans into public housing provident fund loans, which means converting or partially converting commercial loans into provident fund loans, is not new in many regions of the country. In the context of the increasing demand for replacing existing housing loans, but the policy has not yet been implemented, local banks have begun to use this routine operation to loosen a "gap" in lowering the interest rates of existing commercial loans.
On July 21st, a reporter from First Financial News learned from a branch of Changzhou Jiangnan Rural Commercial Bank that customers can lower their original commercial loan interest rates by converting commercial loans into provident fund combination loans. The key is that the remaining commercial loan interest rate in the new contract can refer to the new interest rate level. The account manager told reporters, "I started trying a while ago.". According to the reporter's understanding, the vast majority of banks that implemented this policy in the past, even after the conversion from commercial to public, still had to refer to the interest rate level of the original contract for the remaining commercial loans.
In recent years, many regions have tested the policy of converting commercial loans to provident fund loans, and the specific implementation varies from place to place. "At present, all banks in Jiangsu region can engage in commercial to public transfer business," a branch president of a state-owned large bank in Yangzhou City, Jiangsu Province told reporters. He emphasized, "Normally, after the conversion of commercial loans to public loans, the remaining commercial loan portion should be at the interest rate level agreed upon in the original contract, such as how many points the fixed interest rate should be raised or lowered."
The credit manager of a branch of China Postal Savings Bank in Jiaxing, Zhejiang also stated that new homebuyers applying for loans can achieve a commercial loan interest rate of 4% at the bank. However, even after converting existing commercial loans to combination loans, the interest rate stipulated in the original contract is still followed. "The previous existing loans have not been notified yet that they can be adjusted," said the credit manager.
"However, since last year, there has been a lot of pressure on bank housing loans, with new additions not increasing and customers constantly making early repayments. It is not ruled out that some banks may make some concessions in advance to cater to the market," said the head of a branch of a state-owned large bank in Yangzhou.
The business to public transfer service is not universally available nationwide. According to reporters, this policy is not available in many first tier cities and provincial capitals, such as Shanghai, Hangzhou, Xi'an, Nanjing, Jinan, etc.
"At present, we do not have the business of converting commercial loans to 'housing provident fund+commercial loans', mainly because there have been no adjustments to the housing provident fund policy," said the president of a branch of a state-owned large bank in Weifang City, Shandong Province, to reporters. He added, "If there is a policy for housing provident fund, we can also promote the business of converting commercial loans to housing provident fund+commercial loans, but after the conversion, commercial loans will still be executed according to the original contract."
According to incomplete sorting by reporters, currently, nearly 30 cities across the country are implementing the "business to public" policy, including Changzhou, Urumqi, Lianyungang, Lanzhou, Dalian, Shaoxing, Jinan, Weihai, etc.
Industry insiders say that the interest rates on existing commercial loans are significantly higher than the latest housing loan rates, coupled with the recent downturn in the real estate market, the amount of provident fund loans is not as tight as in previous years, and the policy of "commercial to public" has certain feasibility. Chen Wenjing, Market Research Director of the Index Business Unit of China Index Research Institute, believes that the "commercial to public" business is beneficial for homebuyers to reduce their loan repayment burden, especially in the past few years when the interest rates on home loans have been relatively high. After the "commercial to public" business, the interest rates on home loans can be significantly reduced.
There are also views that the "commercial to public" transformation should expand the beneficiary group. "The 'business to public' policy is relatively strict. For example, most cities still require residents to obtain property certificates for business processing. In some areas, business only covers individuals or families who purchase their first home or apply for housing provident fund loans for the first time. Some restrictions should be relaxed," a researcher from a local property company told reporters.
According to the reporter's understanding, since the end of last year, many regions have relaxed the policy of "business to public". Taking Taizhou City in Jiangsu Province as an example, its recently announced new policy has expanded the scope of policy application, from "normal payment of housing provident fund in Taizhou City for at least 6 months" to "normal payment of housing provident fund in other places for at least 6 months". Hunan Province has also issued a new policy of "commercial to public", which applies to support families of depository workers who own the only self occupied housing. After business adjustments, Hunan will fully support the basic needs of depository worker families and make precise efforts.
