Chinanews client, Beijing, September 22 (Peng Jingru) Personal housing loan pricing benchmark, choose LPR or fixed interest rate?

Although this multiple-choice question was completed at the end of August, and the LPR conversion rate exceeded 92%, there are still people among the "homeowners" who are still struggling: Do you want to go back and change to a fixed interest rate before the end of the year?

Data map: real estate.

Photo by China News Agency reporter Zhang Bin

LPR unchanged for 5 consecutive months

  On September 21, the People's Bank of China authorized the National Interbank Funding Center to announce the latest loan market quote interest rate (LPR): 1-year LPR is 3.85%, and more than 5-year LPR is 4.65%.

The quotations of the two maturity products were the same as last month, and the LPR has remained unchanged for 5 consecutive months.

  The LPR remained unchanged in September, and there have been signs before.

  Since the LPR quotation is linked to the MLF (Mid-Term Loan Facility) interest rate, when the market pays attention to the central bank’s MLF operating interest rate, it also includes the pre-judgment of the LPR quotation.

  On September 15th, in order to maintain reasonable and sufficient liquidity in the banking system, the central bank launched a 600 billion yuan mid-term loan facility (MLF) operation (including the renewal of the MLF expiration on September 17). The winning interest rate of the MLF operation was 2.95% , The same as the previous operation.

  “The price of the central bank’s renewal of MLF has not been lowered, indicating that the possibility of lowering the price of LPR in this period is reduced.” According to analysis by industry insiders, the excessive renewal of MLF also shows that the central bank tends to gradually increase the banking system through MLF operations. Supplement the medium and long-term liquidity, alleviate the pressure of tight liquidity in the medium and long term of the banking system.

Data map.

Photo by China News Agency reporter Wei Liang

Prevent excessive liquidity from entering real estate, etc.

  "The current LPR remains unchanged in line with expectations," Wen Bin, chief researcher of Minsheng Bank, told that recently, as the economy has gradually stabilized and rebounded, market interest rates have experienced a relatively obvious rise.

In order to maintain the stability of market expectations, LPR remains unchanged and continues to support the recovery of the real economy, while preventing idling arbitrage of funds or excessive liquidity from entering the real estate market and other fields.

  According to data from the National Bureau of Statistics, the sales of commercial housing from January to August was 9694.3 billion yuan, an increase of 1.6%, which was the first time this year to turn positive.

In August, the month-on-month increase in the price of new homes in all tier cities in 70 cities slightly expanded; except for the decline in second-tier cities, the month-on-month increase in prices of second-hand housing in first- and third-tier cities has now expanded.

  In order to cool the property market, the real estate regulation took a turning point in July-August. From the comprehensive easing in the first half of the year, a tightening trend began to appear. The cumulative number of policies issued in July-August reached more than 60 times.

  “Thanks to the effective prevention and control of the domestic epidemic and the continuous recovery of the economy after the epidemic, the cumulative year-on-year growth rate of fixed asset investment in the first August of this year has basically returned to positive. In August, the year-on-year growth rate of total retail sales of consumer goods also turned positive for the first time. There is no need for further lower interest rates. At the same time, it also reserves policy space to cope with the global economic recession, overseas epidemics and the uncertainty of the international situation.” The Shell Research Institute believes.

Behind the heating up of the property market, interest rates in the mortgage market fell for 9 consecutive months

  Although the LPR quotation has remained unchanged, the average interest rate on loans for the first and second homes nationwide has been lowered for 9 consecutive months.

  "Since December last year, the data has changed from rising to falling." The latest report of Rong360 Research Institute shows that the monitoring data of the mortgage interest rate of 674 bank branches in 41 key cities shows that in September, the average interest rate of first home loans nationwide was 5.24 %, the average interest rate of second home loans was 5.55%, a decrease of 1 basis point from the previous month.

  “Although the overall housing loan interest rate level still dropped slightly in September, the downward trend of housing loan interest rates in more and more cities has seen an inflection point, and the interest rate inflection point of the second home is more significant than that of the first home.” said Li Wanfu, a researcher at Rong360 Big Data Research Institute .

  The "September Mainstream Mortgage Rate Briefing in Key Cities" released by the Shell Research Institute on the 21st also pointed out that as my country's monetary policy easing gradually weakened, the rate of decline in the average mainstream mortgage interest rate in 36 cities monitored by it has gradually slowed down, and basically stopped falling in September. .

  "Among them, the first set of interest rates was 5.21%, and the second set of 5.51%. The first set of interest rates remained the same month-on-month, while the second set of interest rates dropped slightly. At the same time, the rate of bank lending has also bottomed out. The average lending cycle for housing loans in 36 cities monitored in September 39 days, one day longer than the previous month."

Mainstream loan interest rates in September 2020.

Data source: Shell Research Institute

  "The phenomenon of extended mortgage lending cycle needs attention, which may affect the processing of some home buyers' loans." said Yan Yuejin, research director of the Think Tank Center of E-House Research Institute.

  "The changes in mortgage interest rates and bank lending cycles have minimal impact on buyers' decision to buy a house." said Xu Xiaole, chief market analyst at Shell Research Institute. For example, a commercial loan of 3 million yuan to buy a house, a 25-year loan, has a loan interest rate of 5.39%. The payment method is based on equal principal and interest. If the interest rate drops by 5 basis points, the monthly payment will be reduced by less than 90 yuan, which has little impact.

  Xu Xiaole said that the low and stable mortgage interest rate means that in the short term, buying a house at two different time points will have the same interest rate level and the same monthly payment.

The extension of the loan cycle has lengthened the buying cycle of home buyers.

Housing loan interest rates have slowed down, and there is another opportunity for pricing

  "Although the impact is small, and the LPR hasn't changed for 5 consecutive months, I still want to choose my own." Some "mortgage family" said.

  On August 12, the five state-owned banks of Industrial and Commercial Bank of China, 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 unify individual housing loans within the scope of bulk conversion from August 25 in accordance with relevant rules. Adjusted to LPR pricing.

This means that those who don't change have to apply by themselves, and those who don't apply will default to LPR pricing.

  On September 15, the central bank issued a report stating that most of the newly issued loans of financial institutions have used LPR as the benchmark pricing, and the benchmark conversion of stock floating-rate loan pricing was successfully completed at the end of August 2020, with a conversion rate exceeding 92%.

  However, among the "homeowners" who have been "completely converted", there may be some people who are murmuring: Which one is better?

Can I regret it?

  It should be noted that there is also a key sentence in the bank announcement: After the batch conversion is completed, if you have any objections to the conversion result, you can self-transfer or contact the loan handling bank through relevant channels before December 31, 2020. Negotiation processing.

  That is to say, there is another opportunity before the end of the year to switch the mortgage interest rate back to the original pricing method, or convert it to a fixed interest rate.

However, the pricing basis can only be converted once, and cannot be converted again after the conversion.

Data map: A bank staff counts currency.

Photo by China News Agency reporter Zhang Yun

  The two conversion methods of LPR and fixed interest rate 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 LPR will fall in the future, it would be better to switch to reference LPR pricing; if it believes that LPR may rise in the future, then switching to a fixed interest rate will have an advantage.

There is only one chance to go back, do you want to use it?

  The key to the question is, how will LPR go within the term of your mortgage in the future?

  "This depends on factors such as macroeconomic trends, inflation, supply and demand in the loan market, etc., depending on the market-based quotation of the quoting bank." Sun Guofeng, Director of the Monetary Policy Department of the Central Bank, pointed out at the State Council Policy Briefing on August 25, With the further release of the potential of the LPR reform to promote lower loan interest rates, it is expected that subsequent corporate loan interest rates will fall further.

  In the short to medium term, Hue, chief economist of Founder Securities, believes that in the context of normalized monetary policy, to ease long-term liquidity tensions, the central bank’s main method is to continue to do MLF in excess, along with the regularization of reverse repurchase. Forms of short-term liquidity adjustment.

With the continuous improvement of my country's economic fundamentals, there is basically no possibility of a RRR cut before the end of the year.

  "In the fourth quarter, banks are still under great pressure to reduce structural deposits, and greater credit support is needed in the recovery and development of the real economy. In order to alleviate the pressure on the medium and long-term liquidity of the banking system, on the basis of MLF regulation, appropriate The possibility of structural RRR cuts at this point still exists and is necessary.” Wen Bin believes.

  So, for the last time before the end of the year, if it was you, how would you choose one?