What does LPR floating interest rate mean?

Many people only know about the housing loan interest rate reform and changed it to LPR floating interest rate, but they do not know what LPR floating interest rate means. So the editor will introduce it to you in detail in the following content.

1. LPR refers to the basic loan interest rate, which is also the legal loan interest rate. LPR has a high degree of marketization and can fully reflect the supply and demand situation in the credit market. Using LPR for loan pricing can promote the formation of market-oriented loan interest rates and improve the transmission efficiency of market interest rates to credit interest rates.

2. LPR will be announced on the 20th of each month, and will be postponed in case of holidays. The calculation method of LPR is generated by the same quotation from 18 banks. The calculation method is: remove one price and one, take the average, and re-quote on the 20th of each month. It can be simply interpreted as, this is a market-based interest rate mean.

3. Previously, the loan interest rate of commercial banks was "central bank loan benchmark interest rate × (1±N)", but after October 8, 2019, the loan interest rate of commercial banks will become LPR±N basis points. . LPR includes two varieties with a maturity of 1 year and a maturity of more than 5 years.