First, the first drop: the mortgage interest rate is lowered. On May 15, 2023, the Central Bank and the China Banking Regulatory Commission jointly issued the Notice on Relevant Issues Concerning the Adjustment of Differentiated Housing Credit Policy (Yinfa [2022] 1 15), which made it clear that the lower limit of the first home loan interest rate should not be lower than the loan market quotation rate (LPR) by minus 20 BP.
-For customers who apply for commercial personal housing loans for the first time, the purchase cost can be reduced.
-for existing commercial individual housing loan customers, the interest rate is still in accordance with the original contract.
Second, the second decline: the 5-year LPR quotation is lowered. On May 20, 2023, the central bank issued an announcement that the LPR over five years decreased by 15 BP, from 4.6% in the previous month to 4.45%.
-Customers who newly apply for the first set of commercial personal housing loans, on the basis of reducing the minimum amount of the first set of commercial personal housing loans by 20 BP, can enjoy double preferential treatment by adjusting the minimum interest rate of the first set of commercial personal housing loans from 4.4% to 4.25% (=4.4%- 15 BP).
-For new customers who apply for commercial personal housing loans for second homes, the lower limit of interest rate for second homes will also be lowered to 5.05% (=4.45% 60 BP) with the downward adjustment of LPR, and they can also enjoy policy dividends.
-For existing commercial personal housing loan customers, after the repricing date, the interest rate agreed in the contract between the purchaser and the commercial bank will be lowered by 15 BP, which can also save some interest expenses.
These are all national policy standards, and local policies are still different. Please refer to the requirements of local government and regulatory authorities for the actual mortgage interest rate.
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