The bank automatically converted it to LPR without signing it. Can I still transfer it back to a fixed one?

If you don’t sign, the bank will automatically switch to LPR interest rate. You can go to the bank to negotiate to switch to a fixed interest rate. Take the Bank of China as an example. If the Bank of China does not want to convert to LPR interest rates in batches, it can go to the loan agency for negotiation from September 1, 2020 to December 31, 2020.

Starting from August 25, 2020, the Bank of China will convert the existing floating rate personal housing loan pricing benchmarks that meet the conversion conditions but have not yet been converted into LPR interest rates in batches.

Extended information:

The interest rate pricing method of the original contract is uniformly converted to the LPR as the pricing basis plus points (the points can be negative values), as follows:

(1) The added point (can be a negative value) value is the difference between the latest execution interest rate value of the original contract and the corresponding term LPR released in December 2019.

(2) The value of the additional points (can be negative) will be fixed during the remaining term of the contract.

(3) For equivalent conversion, the interest rate level remains unchanged from the time of batch conversion to the first repricing date (interest rate adjustment date) (exclusive).

(4) On each re-pricing day, the loan interest rate level is calculated and determined by the corresponding term LPR on the day before the re-pricing day and the point-added value determined during batch conversion.

(5) The repricing cycle will be uniformly converted to 12 months. The repricing date remains unchanged from the original contract.

Bank of China - Announcement on the batch conversion of existing floating rate personal housing loan pricing benchmarks to LPR interest rates. Can housing loans converted to LPR be converted back to fixed interest rates?

If the user's mortgage interest rate is actively chosen by the user to convert to LPR, then the interest rate cannot be reversed because each person has only one chance to convert. The user's mortgage interest rate is converted to LPR as disclosed by the bank. At this time, the user can choose an independent approach or negotiate with the bank to switch back to the previous fixed interest rate.

It should be noted that if you want to switch back to the original interest rate, you must complete it before December 31, 2020 (inclusive). If you miss this deadline, users who convert in batches will no longer be able to switch mortgage interest rates. Can LPR be converted back to fixed repayment later?

Yes, but it can only be converted once.

It should be noted that there is another key sentence in the bank announcement: after the batch conversion is completed, if you have any objection to the conversion result, you can make a self-service transfer through relevant channels before December 31, 2020 (inclusive) Return or negotiate with the loan agency.

That is to say, there is still one opportunity before the end of the year to switch the mortgage interest rate back to the original pricing method, or to a fixed interest rate. However, the pricing basis can only be converted once, and cannot be converted again after conversion.

Extended information:

LPR and fixed interest rate conversion methods each have their own advantages. The specific choice depends on your own judgment, especially the judgment of future interest rate trends. The central bank previously explained that if it believes that the LPR will fall in the future, then it will be better to switch to reference LPR pricing; if it thinks that the LPR may rise in the future, then it will be advantageous to switch to a fixed interest rate.

In the short and medium term, Founder Securities Chief Economist Cai Shai believes that under the background of normalized monetary policy, the central bank’s main method to ease long-term liquidity tensions is to extend MLF in excess, accompanied by regularized , short-term liquidity adjustment with reverse repurchase as the main form. As China's economic fundamentals continue to improve, there is basically no possibility of a RRR cut or interest rate cut before the end of the year.

Reference material: People's Daily Online - LPR will remain unchanged for five months. Do you want to convert your mortgage loan to a fixed interest rate? Opportunity is only 1. After ICBC automatically converts LPR, can it be changed back to fixed interest rate?

After ICBC automatically converts LPR, you can change it back to a fixed interest rate through negotiation with the bank.

According to the "Announcement on the Batch Conversion of the Existing Floating Rate Individual Housing Loan Pricing Benchmarks of the Industrial and Commercial Bank of China into LPR", after the batch conversion is completed, if you have any objections to the conversion results, you can contact us through your mobile phone before December 31, 2020 (inclusive) The bank can transfer it by itself or negotiate with the loan agency.

ICBC’s automatic LPR interest rate conversion is based on the interest rate pricing method agreed in the original contract and is formed by adding points based on the LPR of the corresponding period as the pricing benchmark. The added point value is equal to the latest execution interest rate level of the original contract and the one released in December 2019. The difference between the LPR of the corresponding period, the added point value can be negative and is fixed during the remaining period of the contract.

Extended information:

Floating rate personal housing loans priced with reference to the loan benchmark interest rate that have been issued by ICBC before January 1, 2020 and that have signed contracts but have not been issued will be Convert to LPR interest rate, except for the following loans:

(1) Loans whose remaining loan term is less than one repricing cycle, that is, loans whose loan maturity date stipulated in the original contract is earlier than the next repricing date.

(2) Fixed interest rate loans.

(3) Provident fund personal loans.

(4) Interest-rate discount loans from individual housing transfer companies that are not converted after negotiation with the Provident Fund Center.

(5) Personal housing loans priced with reference to LPR.

(6) Current overdue loans.

Industrial and Commercial Bank of China - Announcement on batch conversion of existing floating rate personal housing loan pricing benchmarks into LPR interest rates