The call for a reduction in existing housing loans is rising again! Multiple banks respond to city | mortgage interest rates | banks

With the continuous reduction of new mortgage interest rates, there is also a high demand in the market for the reduction of existing mortgage interest rates, especially for homebuyers who bought houses at high mortgage interest rates in the past few years. They hope that the objective fact of the "huge gap" between new and old mortgage interest rates can be taken seriously.

Recently, a screenshot circulating on the internet in the market claimed that ICBC's existing housing loan customers can apply to the loan handling bank to sign a new housing loan contract as long as they have no bad records such as overdue repayment within two years, and the housing loan interest rate will be executed according to the latest loan interest rate. On the evening of July 17, a reporter from the Securities Times sent a message to the 95588 customer service hotline of Electrician Bank. The staff said that the bank had paid attention to the news circulating in the market, but had not received any formal notice at present. Customers can pay attention to the bank's official website or official account, or consult with the branch handling the housing loan.

Subsequently, the reporter consulted with several banks including Bank of China, and the customer service personnel of the interviewed banks all stated that they have not yet received any notice of a reduction in the interest rates of existing housing loans.

Central Bank: Encourage commercial banks and borrowers to negotiate independently to change contract agreements, or issue new loans to replace existing loans

Recently, the statement about the central bank's interest rate on existing loans has attracted widespread attention.

On July 14th, Zou Lan, Director of the Monetary Policy Department of the People's Bank of China, stated at the "News Conference on Financial Statistics for the First Half of 2023" that "in accordance with the principles of marketization and legalization, we support and encourage commercial banks and borrowers to independently negotiate changes to contract agreements, or to issue new loans to replace existing loans."

Zou Lan stated that due to changes in price relationships such as investment returns and mortgage interest rates, there has been a significant increase in the phenomenon of residents using deposits or reducing other investments to repay existing loans in advance. In addition, he believes that the increase in early repayment of loans is related to the high level of interest rates on existing housing loans.

Industry insiders believe that there are two ways to adjust the interest rates of existing housing loans: direct and indirect reductions, and loan replacement should be limited to the bank in principle. No matter which method is adopted, it will not be an administrative command style, but based on the principles of marketization and legalization. The possibility of a comprehensive reduction in stock is expected to be low, and specific policies will vary depending on different regions and credit entities, waiting for regulatory or commercial bank regulations to be issued.

In fact, there have been precedents in China for the reduction of interest rates on existing housing loans. Against the backdrop of the 2008 international financial crisis, in early 2009, some state-owned banks adjusted their discount rates for existing housing loan customers.

The interest rates for first-time home loans in multiple regions have entered the "three eras"

With the adjustment of LPR in June, the interest rates of personal housing mortgage loans in many cities such as Beijing, Shanghai, Guangdong, and Suzhou have recently been adjusted accordingly. Among them, the interest rates of first home loans in some cities have dropped to 3.6%.

According to monitoring data from China Index Research Institute, since 2023, more than 40 cities in China have adjusted the lower limit of first home loan interest rates to below 4%. The lowest interest rate for first home loans in cities such as Zhuhai, Nanning, Liuzhou, and Zhongshan has dropped to 3.7%. Cities such as Zhaoqing, Zhanjiang, Yunfu, and Huizhou have cancelled the lower limit of first home loan interest rates. As of the end of the second quarter, a total of 39 out of 70 large and medium-sized cities were able to maintain, lower or cancel the lower limit of local first home loan interest rates in a phased manner. The LPR for more than 5 years has been lowered by 10 basis points this time, and the first home loan interest rates in eligible cities are expected to fall within the range of 3.6% to 3.9%, continuing to break through historical lows.

Expert: The difficulty of stopping the decline in housing prices is still relatively high

Li Yujia, Chief Researcher of Guangdong Housing Policy Research Center, stated that reducing the interest rate on existing housing loans will to some extent alleviate early repayment of loans and the increase in second-hand housing listings, but it will not reverse this trend. The trend of early repayment of loans and increasing listing of second-hand houses will only reverse unless housing prices stop falling and even there is an expectation of an increase. But currently, the monthly transaction volume of second-hand houses in hot cities is lower than the newly listed volume, making it difficult for housing prices to stop falling.

However, he also stated, "In the future, the housing credit market will enter the era of stock. In addition to the top-down 'interest rate reduction', the bottom-up 'interest rate reduction' of stock housing loans, that is, the battle to seize stock resources, is expected to start soon."

Chen Wenjing, Director of Market Research at Zhongzhi Research Institute, stated that the demand side places more emphasis on policy accuracy. There is marginal optimization space for housing credit policies in core first and second tier cities, and reducing down payment ratios and mortgage interest rates is an important direction. However, the expectation of a reduction in stock mortgage interest rates is weak. Overall, the current tone of real estate policies is still mainly based on bottoming out, and all parties in the market should maintain reasonable expectations.