The pricing benchmark conversion has exposed many people to LPR. For example, a friend who has applied for a loan at the Bank of China received a notice from the Bank of China that the pricing benchmark was converted to LPR, but he did not quite understand what it meant. It is to convert LPR, so what does Bank of China convert to LPR mean? Let’s find out together!

What does Bank of China convert to LPR mean?

Bank of China converts to LPR means to convert the mortgage interest rate type It is the pricing basis for floating rate loans, which is converted from the original central bank loan benchmark interest rate to LPR. For details, please refer to the People's Bank of China Announcement [2019] No. 30. The conversion of the pricing basis of floating rate loans to LPR is not just for Bank of China, but all financial institutions need to make the conversion.

The English name of LPR is LoanPrimeRate, and the Chinese name is loan base interest rate. LPR is the loan interest rate implemented by commercial banks for their best customers. It is calculated by quoting quotes from 18 banks, excluding the highest and lowest quotes, and then calculating the weighted average of the remaining quotes. LPR is more market-oriented than loan benchmark interest rates and can reflect changes in market interest rates in a timely manner.

In addition, Bank of China borrowers have two options when converting their mortgage interest rates to LPR. They do not have to convert to LPR floating pricing, or they can convert to a fixed interest rate. After conversion, the mortgage interest rate will be within the remaining term of the contract. Internally fixed. The specific interest rate type to be converted to can be selected according to personal actual conditions. It should be noted that the mortgage interest rate can only be converted once and cannot be changed again after conversion.

The above is the answer to what does Bank of China convert to LPR. I hope it will be helpful to you.