At present, the mortgage interest rate faces two choices, fixed interest rate or LPR? How to choose the most crucial thing is to look at the interest rate trend in the future loan market.

The trend of loan interest rate is closely related to the overall economic environment. Usually, with the rapid development of economy, the corresponding loan interest rate will also rise. On the contrary, if the future economic development is not optimistic and the economic growth rate slows down, the bank's loan interest rate may also be reduced.

According to the current development trend of China's economy, experts judge that it is impossible for China's economy to maintain high-speed growth in the coming decades. Slowing economic growth and shrinking social investment are definitely a general trend. Once the economic development slows down and social investment slows down, the central bank may stimulate social investment by lowering interest rates or RRR at any time, and both the benchmark interest rate and LPR will decrease accordingly.

However, generally speaking, the central bank will not easily use interest rate cuts as an important means, but will use more market means such as LPR to regulate social funds. If the central bank does not cut interest rates in the future, the price of LPR may be much lower than the benchmark interest rate. In this context, the mortgage interest rate for choosing LPR may be relatively low.

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LPR interest rate conversion time

According to the Bank's announcement: starting from March 1 2020, financial institutions should negotiate with customers of existing floating interest rate loans on the conversion terms of pricing benchmark, and convert the interest rate pricing method agreed in the original contract into an LPR pricing benchmark plus item (the plus item can be negative), and the plus item will remain unchanged for the remaining term of the contract; It can also be converted into a fixed interest rate. Pricing benchmark can only be converted once, and cannot be converted again after conversion. The floating interest rate loan of inventory in the last repricing cycle shall not be converted. In principle, the conversion of the pricing benchmark of floating rate loans should be completed before August 3, 20201.