Five major state-owned banks, including ICBC, China Construction Bank, Agricultural Bank of China, Bank of China, and Postal Savings Bank of China, issued an announcement at the same time.
Personal mortgages will be transferred to LPR in bulk from August 25
On August 12, the five major state-owned banks of ICBC, China Construction Bank, Agricultural Bank of China, Bank of China and Postal Savings Bank of China issued an announcement at the same time that they will uniformly adjust individual housing loans within the scope of batch conversion to LPR (loan loans) from August 25. Market price rate) pricing method. The announcement also made it clear that after the batch conversion is completed, if there is any objection to the conversion result, it can be transferred back through relevant channels or negotiated with the loan handling bank before December 31, 2020 (inclusive).
On July 20, the Bank of Communications took the lead in issuing an announcement that on August 21, it will uniformly adjust to the LPR floating rate plus or minus point method for stock floating rate mortgages that have not yet been converted into loan market quoted rates (LPR) or fixed rates. For customers of Bank of Communications who have objections to the batch conversion, they can also negotiate with the loan handling bank before December 31, 2020.
How to determine the interest rate after batch conversion?
According to the announcement issued by the central bank at the end of last year, the conversion of stock floating rate personal loan pricing benchmarks will be officially launched on March 1, 2020, and will be completed before August 31, 2020 in principle.
The central bank gave two options for existing mortgage customers. One is to switch to "LPR + plus points" floating interest rate, that is, to convert the interest rate pricing method agreed in the original contract to the LPR as the pricing basis plus points (plus points can be negative), plus point values It is fixed during the remaining period of the contract; the second is to convert to a fixed interest rate. Moreover, the pricing basis can only be converted once, and cannot be converted again after the conversion.
According to the announcement of the five major banks on the 12th, this batch conversion is to uniformly convert the interest rate pricing method agreed in the original contract to the LPR plus point formation method, and the added point value is equal to the latest execution interest rate level of the original contract and the corresponding period LPR issued in December 2019 The difference, plus point value can be negative, and fixed during the remaining period of the contract.
From the point of conversion to the first interest rate adjustment date (repricing date) thereafter, the mortgage interest rate remains unchanged. On each interest rate adjustment day, the loan interest rate level will be recalculated based on the sum of the most recently released corresponding period LPR and the point value.
Which loans do not participate in batch conversion?
Various banks also clarified the scope of this batch conversion in their announcements. Participating in this batch conversion are stock floating-rate loans that have been issued and signed contracts but have not been issued before January 1, 2020, and at the same time have not been actively converted before the batch conversion date. The banks also listed the types of loans that do not participate in the conversion, mainly housing provident fund personal housing loans and provident fund discount loans.
Among them, ICBC listed in detail six types of loans that do not participate in batch conversion: (1) Loans whose remaining loan term is less than one repricing cycle, that is, loans whose maturity date agreed in the original contract is earlier than the next repricing date; ( 2) Fixed interest rate loans; (3) Provident fund personal loans; (4) Individual housing transfer agency discount loans that are not converted after negotiation with the Provident Fund Center; (5) Personal housing loans that have been priced with reference to LPR; (6) Current overdue loans.
The scope of the batch conversion of the Bank of China is: floating-rate personal housing loans priced with reference to the benchmark interest rate for reference loans that have not completed the conversion of the pricing benchmark before August 24, 2020 (excluding provident fund personal housing loans, military provident fund loans, and provident fund discounts) loan).
The Agricultural Bank of China stipulates that the existing floating-rate personal housing loans (including personal commercial housing loans) that have been issued or signed before January 1, 2020 and have not been issued, and as of August 24, 2020 (inclusive), have not yet been converted into pricing benchmarks. Including provident fund loans and provident fund discount loans).
The scope of the Bank of Communications is commercial personal housing loans with floating interest rates priced with reference to the benchmark lending rate that have been issued before January 1, 2020, have signed contracts but have not been issued, and have not been converted before August 21 (excluding provident fund loans and Provident fund discount loans).
The scope stipulated by the Postal Savings Bank of China is: as of August 25, 2020 (exclusive), the stock floating-rate commercial personal housing loans that have not yet been converted into pricing benchmarks (excluding provident fund personal housing loans).
What should I do if I disagree with the batch conversion result?
There is still a period of time before the unified date of batch conversion. If customers do not want to switch to LPR plus some pricing methods, they can perform independent conversion through mobile banking, smart teller machines, loan handling banks and other channels before batch conversion, and choose a fixed interest rate method. It should be reminded that the loan pricing benchmark can only be converted once and cannot be converted again after conversion.
According to the announcements of various banks, if a customer participates in a batch conversion and later disagrees with the conversion result, they can self-service transfer through mobile banking or negotiate with the loan handling bank before December 31, 2020 (inclusive).
The Agricultural Bank announced that if customers wish to cancel the batch conversion and maintain the original contract pricing method, they can apply through relevant channels, but the cancellation can only be processed once.
According to the announcement of the Big Six Banks, customers who disagree with the batch conversion should be able to switch to the original pricing method instead of having to choose a fixed interest rate.
Earlier, some bankers stated that for those who fail to perform the conversion of the pricing benchmark before August 31, 2020, the bank will follow the relevant requirements of the People's Bank of China. However, the central bank currently does not have relevant rules for stock mortgages that neither agree to switch to LPR pricing nor choose fixed interest rates. Photo courtesy/Visual China
Major banks have different regulations on interest rate adjustment dates
A reporter from the Beijing Youth Daily carefully studied the announcements of the six major companies and found that their rules on interest rate adjustment days were not completely consistent. Previously, the repricing cycle for most of my country’s existing mortgages was one year, and the repricing date was January 1 of each year or the date corresponding to the loan issuance date.
According to the announcements of the six major banks, China Construction Bank, Bank of Communications and Postal Savings Bank of China all stipulated the interest rate adjustment cycle and the interest rate adjustment date to remain unchanged from the original contract. The repricing cycle of Bank of China has been uniformly converted to 12 months, and the repricing date remains unchanged from the original contract. ABC’s repricing cycle and repricing day remain unchanged from the original contract; for loans with a repricing cycle shorter than one year, the repricing cycle is adjusted to one year.
Only ICBC's repricing date is adjusted to the date corresponding to the loan issuance date. From the first repricing date, on each repricing date, the interest rate level is recalculated and determined by the corresponding period LPR of the most recent month and the above-mentioned point value. If the conversion date of the pricing benchmark is the same as the adjusted repricing date, no repricing will be performed on the conversion date, and the loan will be repriced on the next repricing day.
For customers whose repricing date is after the batch conversion is completed in September this year, the latest mortgage interest rate will be implemented within this year; and the repricing date is January 1 of each year or batch conversion customers before this centralized adjustment. It will be adjusted at the specified time next year.
For example, if the customer's loan issuance date is October 9, 2010, and the customer participates in batch conversion on August 26 this year, and the repricing date is determined to be October 9th each year, the customer will be on October 9th this year To change the pricing benchmark and carry out the first repricing, the loan execution interest rate shall be calculated according to the LPR value announced on September 20 this year; if the customer’s repricing date is June 10 each year, it will remain unchanged after participating in the batch conversion until The first repricing will take place on June 10, 2021, and the effective interest rate will be calculated based on the LPR in May 2021.
This group of articles / our reporter Cheng Jie