Author: Du Chuan

　　Since January, the repayment pressure of stock mortgage customers has eased.

　　In 2022, the LPR (Loan Quoted Rate), which is closely related to the mortgage interest rate, has experienced three reductions, totaling 35 basis points.

Since the mortgage interest rate repricing date for home buyers is mostly January 1 of each year, this means that starting from New Year's Day in 2023, the monthly mortgage payments of these home buyers will be significantly reduced.

Stock mortgage interest rate cut

　　Starting from January 1, the repayment pressure of stock mortgage customers will be greatly reduced. How much money can be saved?

　　A reporter from China Business News learned that in January 2020, Mr. Ouyang bought his first house with a mortgage loan in Beijing, with a pure commercial loan of 800,000 yuan, which will be repaid in equal installments of principal and interest over 25 years.

The loan interest rate in January 2022 is 4.65% (LPR in December 2021) + 55 basis points = 5.20%, and the monthly payment is 4793.98 yuan.

　　He chose January 1 of each year as the repricing day.

The loan interest rate in January 2023 is 4.3% (LPR in December 2022) + 55 basis points = 4.85%, and the monthly payment is 4607.07 yuan.

　　This means that after re-pricing according to the latest LPR on January 1, Ouyang can pay a monthly payment of 186.91 yuan less.

By analogy, if the mortgage is 2 million yuan, the buyer can save nearly 400 yuan per month and nearly 4,800 yuan a year; if the mortgage is 4 million yuan, the home buyer can save nearly 10,000 yuan in interest a year.

Mortgage rate repricing

　　On December 20, 2022, the last LPR of the year was released. The 1-year LPR reported 3.65%, and the 5-year LPR reported 4.3%, both unchanged from the previous month.

　　Although the LPR with a period of more than 5 years has not been lowered this time, since 2022, the LPR with a period of more than 5 years, which is closely related to the mortgage interest rate, has experienced three reductions, with a total reduction of 35 basis points.

　　Respectively, on January 20, 2022, the LPR over 5 years will drop from 4.65% to 4.6%, down 5 basis points; on May 20, the LPR over 5 years will drop from 4.6% to 4.45%, down 15 basis points ; On August 22, the LPR with a period of more than 5 years fell from 4.45% to 4.3%, a reduction of 15 basis points.

　　This also means that some home buyers who are repaying their loans will experience a re-pricing of loan interest rates from January 1, 2023.

　　In August 2019, LPR was calculated based on the quotation of the new formation mechanism.

Under the new LPR mechanism, the mortgage interest rate is changed from the previous fixed "central bank loan benchmark interest rate × (1 + floating ratio)" to the loan market quotation rate (LPR) of the corresponding period, which is formed by adding points to the pricing benchmark, that is, the mortgage interest rate = "LPR + fixed basis point", to calculate the monthly payment.

　　For existing loan users, each loan customer can choose between "fixed interest rate" and "floating interest rate" after the mortgage interest rate is changed.

　　But repricing dates vary for different customers.

If you choose a fixed interest rate for the mortgage, the interest rate during the remaining loan period will not change with the change of the LPR level; if the mortgage is anchored to the LPR, the interest rate will be readjusted once a year, and the mortgage interest rate will be repriced. Two types, one is on January 1st of each year, recalculated according to the LPR plus points on December 20th of the previous year, and the other is that the re-pricing date is the day corresponding to the loan issuance date, and on each re-pricing date, the interest rate level is changed from the latest month The corresponding period LPR and the above-mentioned plus value are recalculated and determined.

　There is still a possibility of downside for LPR with a period of more than 5 years

　　In the past year, under the release of favorable policies, more and more urban first-home loan interest rates have entered the "three eras".

　　According to the latest data from the central bank, the weighted average interest rate of newly issued housing loans to residents in October was 4.3%, which is already lower than the lowest level (4.34%) set in June 2009 since the historical record.

　　The People's Bank of China's Monetary Policy Committee's regular meeting in the fourth quarter of 2022 pointed out that it is necessary to do a solid job in ensuring the delivery of buildings, people's livelihood, and stability, meet the reasonable financing needs of the industry, promote industry restructuring and mergers, and improve the asset and liability status of high-quality leading real estate companies According to the city, implement policies to support rigid and improved housing needs, provide housing financial services for new citizens and young people, safeguard the legitimate rights and interests of housing consumers, and ensure the stable development of the real estate market.

　　Many experts believe that in 2023, there is still a certain possibility of downside for LPR with a period of more than 5 years.

　　Wang Qing, the chief macro analyst of Dongfang Jincheng, judged that there is still a lot of room for the policy toolbox in the later stage to relax the conditions for buying houses, reduce the down payment ratio, and lower the interest rate of residential mortgages.

Among them, the key is to guide the further reduction of LPR quotations with a term of more than 5 years, and to continue to reduce the interest rate of residential mortgages, and the urgency is very high.

This means that even if the policy interest rate (MLF interest rate) remains stable in 2023, targeted interest rate cuts for real estate will continue to advance, and may land in January 2023 at the earliest.

"If various demand-side support policies, including targeted interest rate cuts, are adjusted in place, around the middle of 2023, the property market is expected to show a trend of recovery."

　　Wen Bin, Chief Economist of China Minsheng Bank, believes that from the perspective of bank interest rate spreads, the re-pricing date of residential mortgages is mostly on January 1 each year, and it does not rule out that the quotation bank will postpone it until 2023 from the perspective of maintaining annual asset returns. It is possible to lower the 5-year LPR quotation quarterly, which can not only effectively promote credit growth, but also give itself a time window to further reduce debt costs, which is feasible.