Why are five-year loan rates higher than one-year?

1, the longer the term of the loan, the more risky the interest rate is also higher

Loans can be divided into short-term loans and long-term loans, usually 5 years as the cut-off line. Like if the loan term within 1 year for short-term loans, 5 years and above for long-term loans, and long-term loan interest rates will be higher than the short-term loan interest rates, the greater the factor is the longer the loan term, the greater the risk.

2, the longer the cost of capital utilization, the higher the interest rate

The difference between the one-year and five-year period is that the quoting mechanism is different, the 1-year lpr interest rate quotes are based on the cost of funds (including the cost of MLF), the cost of risk, the cost of capital utilization, and the cost of operation; and the 5-year lpr quotes for the 1-year lpr + term premium.

LPR refers to the Loan Market Quoted Rate, which is divided into one-year and five-year terms, and the LPR rate is floating, thus giving the user a variety of possibilities for lending. At present, there are directly corresponding benchmarks for personal housing loan interest rates of 1 year and 5 years or more, and benchmarks for personal housing loan interest rates of up to 1 year and 1 year to 5 years, which can be independently chosen by lending banks between the two term varieties. After the reference benchmark is determined, the term spread factor can be reflected by adjusting the value of the markup.

3, the higher the country's future GDP growth rate the higher the interest rate

First of all, mortgage loans are almost the lowest interest rate the people can borrow a large amount of leverage, and more importantly, housing prices have been rising, the first and second tier of housing prices rose much higher than the mortgage rate, the people do not count the small amount of money. But now the situation is different, the bank is facing a serious asset shortage, I can get three or four banks every day to help loan calls, commercial loan interest rates are much lower than the mortgage rate, and now the house prices have not gone up, if the bank is completely according to the market-oriented pricing, mortgage interest rate is now certainly not up to 4.45%

If the expected future GDP growth rate is only 3-4%, what makes the 5-year LPR can be as high as 4.45%? The US is even inverted right now between the 1-year and 5-year treasury rates, with the 1-year 20BP higher than the 5-year. so the lpr has its origins in GDP as well.

lpr why not 1 to 5 years

lpr why not 1 to 5 years?lpr is the loan market offer interest rate, there are 1 year and 5 years or more of two maturity varieties, the difference between the two is mainly the length of time is different and pricing interest rates are different, but the nature is the same.

What is the meaning of five-year and one-year term in LPR rate?

A positive answer

The difference between the two varieties of LPR rates, five years or more and one year, is mainly.

Two, specific analysis

1, the loan term is different.

General loan term of less than one year, as well as one to five years are based on the one-year LPR rate.

Loans with a maturity of more than five years are subject to the five-year or more LPR rate.

For example, if you take out a commercial loan for personal housing, the pricing benchmark for its interest rate looks at the five-year or more LPR rate (commercial loan rates are formed by adding points to the LPR of the corresponding maturity as the pricing benchmark) as the term of the loan is commonly chosen to be twenty or thirty years.

2. Pricing is different.

One-year LPR rates will naturally be quoted at a lower rate than five-year-plus LPR rates.

And the current quote is.

The one-year LPR rate is 3.7 percent.

The five-year plus LPR rate is 4.6%.

And since LPRs are re-quoted on the 20th of each month (postponed in case of holidays) (they are usually announced at 9.30pm on the same day), the rate may still fluctuate and change after that.

The details can be found through the websites of the National Interbank Offered Rate Center and the People's Bank of China.

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Three, the benchmark interest rate is the monthly interest rate or annual interest rate?

The prime rate refers to the annual interest rate.

Loans and deposits have a benchmark interest rate, which is announced by the People's Bank of China, and commercial banks will be based on the benchmark interest rate given by the People's Bank of China, within a certain range, for the loan interest rate, deposit interest rate adjustment.

Therefore, the benchmark interest rate has a strong reference significance, but the People's Bank will not often adjust the benchmark interest rate.

After the benchmark interest rate is adjusted, the deposit and lending rates of commercial banks will also be adjusted, so it can be seen that the benchmark interest rate will have a direct impact on our daily life after it is adjusted.

China's benchmark interest rate is 1-year lpr or 5-year lpr

China's benchmark interest rate is both 1-year lpr and 5-year lpr, with the 1-year LPR at 3.65 percent and the 5-year or more LPR at 4.3 percent, both of which remain unchanged.

This year, LPRs have seen cuts in three months, with the 1-year LPR and 5-year LPR falling by a cumulative 15 basis points and 35 basis points, respectively, with the latest cut coming in August.

According to the report, LPR is quoted by each quoting bank at the open market operating rate (mainly referring to the medium-term lending facility rate) plus a point formation, which is calculated by the National Interbank Lending Center to provide pricing reference for bank loans. Currently, LPR includes two varieties of 1-year and 5-year or more.