Both benchmark interest rate and LPR are reference for loan pricing. The difference is that the benchmark loan interest rate is announced by the central bank, while the LPR is quoted by the quoting banks according to the open market operating interest rate (mainly referred to as the medium-term lending convenience rate, MLF) and calculated by the National Interbank Funding Center. Comparatively speaking, LPR is a market-oriented indicator.

Changing the benchmark interest rate to LPR also has a great impact on stock mortgage loans. Under the original mechanism, mortgage interest rate = benchmark loan interest rate *( 1+ 10%) (assuming floating interest rate is 10%), which is usually adjusted once a year. The problem now is that the term of mortgage loan is as long as 20-30 years, and the benchmark interest rate is basically not used in the future, that is, the benchmark interest rate remains unchanged.

Extended data:

Under the new mechanism, mortgage interest rate =

LPR*( 1+ 12%), if the floating ratio is 12%, of course, this ratio is affected by real estate regulation. If the supervision is strict, the floating rate will rise.

After the floating interest rate is determined, mortgage loans are generally adjusted according to LPR every year. If LPR falls, the loan interest rate will fall, which can also save some interest. Some bankers have reported that if the LPR changes greatly, it can be adjusted once every six months after the agreement.

Baidu encyclopedia -LPR