The benchmark interest rate is the guiding interest rate for commercial banks' deposits and loans and discounts announced by the People's Bank of China (the central bank), and the deposit and loan interest rates of financial institutions can fluctuate on the basis of the benchmark interest rate. Benchmark interest rate is an important prerequisite for interest rate marketization, and it is also a recognized reference for interest rate level. The central bank will adjust the benchmark interest rate according to the monetary policy objectives. What we usually hear is the adjustment of the central bank's benchmark interest rate, which corresponds to the upward and downward adjustment respectively.
LPR interest rate is the quoted interest rate in the loan market. LPR is based on the joint quotation of ICBC, CCB and other 18 banks, and is calculated by arithmetic average after removing the highest price and the lowest price. The LPR interest rate is re-quoted on the 20th of each month. Compared with the benchmark interest rate of the central bank, LPR is more market-oriented.
According to the announcement of the central bank, the interest rate of the first set of individual housing loans shall not be lower than the corresponding term LPR, and the interest rate of the second set of individual housing loans shall not be lower than the corresponding term LPR plus 60 basis points. According to the latest interest rate of LPR, the interest rate of the first home loan shall not be lower than 4.85%, and the interest rate of the second home loan shall not be lower than 5.45%. Compared with the benchmark interest rate of the central bank in the same period, it can be found that the mortgage interest rate has not changed much under the new LPR mechanism. However, the LPR interest rate is re-quoted on the 20th of each month, and the later trend is unpredictable (with high floating probability). Please pay attention to the latest LPR quotation.
For reference.