China News Service, February 20 (China News Palace Hongyu) The historic “interest rate cut” is here!

　　On the 20th, the People's Bank of China authorized the National Interbank Funding Center to announce the latest loan market quoted interest rate (LPR): 1-year LPR was 3.45%, the same as the previous value; 5-year and above LPR was 3.95%, 25% lower than the previous value. basis points.

　　As an "unexpected" adjustment after 6 months, experts pointed out that this LPR quotation will drive down personal mortgage interest rates and monthly payments. Taking a 30-year equal principal and interest repayment of 1 million yuan as an example, the accumulated monthly payment for 30 years will be 52,000 yuan less.

  Loan prime rate (LPR) trends.

5-year LPR “interest rate cut” hits history

　　“The decline in LPR over 5 years exceeds expectations!”

　　Dong Ximiao, chief researcher of China Merchants Union, said in an interview with Sino-Singapore Finance that although this LPR quotation adjustment was "expected", the LPR over 5 years fell sharply by 25 basis points, far exceeding market expectations and setting a new record since the reform of the LPR formation mechanism. the largest decline since.

　　"This first sends a strong signal to boost residents' housing consumption and promote the stable development of the real estate market." Dong Ximiao pointed out that for existing mortgage loans, the mortgage interest rate will be adjusted after the repricing date; for new mortgage loans, it is expected that most The bank will keep the points increase unchanged on the basis of this LPR, thereby reducing the actual interest rate of new mortgage loans.

　　China News Finance noted that if the mortgage interest rate is subsequently adjusted, the cumulative monthly payment of 1 million yuan in equal principal and interest repayments over 30 years will be reduced by 52,000 yuan, and the monthly payment will be reduced by 144.8 yuan.

　　It should be noted that after the LPR adjustment, the user’s mortgage interest rate will not be adjusted immediately. Industry insiders pointed out that generally speaking, the repricing date of mortgage interest rates is January 1 of each year or the loan issuance date (different banks have different policies, and users can choose when signing a loan agreement). Therefore, adjustments to existing mortgage loans will be implemented in the next cycle.

  RMB. Photo by Gong Hongyu of Sino-Singapore Finance

Asymmetric adjustment delivers triple signals

　　In addition to the "exceeding expectations" adjustment range, the asymmetric adjustment of the LPR this time is also worthy of attention: the 1-year LPR continues to "stand still", and the 5-year LPR is lowered after 6 months.

　　According to Yang Chang, chief analyst of Zhongtai Securities, the asymmetric reduction sends at least three signals:

　　First, monetary policy is also cooperating with the stable start of the economy. After the Spring Festival holiday, it is more obvious to work from the capital supply side by reducing loan interest and financing costs to support the stable start of the economy in 2024;

　　Second, the asymmetric reduction of interest rates of different maturities indicates that the policy is focused on the objects it hopes to play a role in. Keeping the 1-year LPR unchanged may indicate that the intention to stimulate manufacturing investment and consumption is relatively stable;

　　Third, the current significant reduction of the 5-year LPR interest rate by 25 basis points, combined with the recent intensive introduction of many policy measures around the real estate market, fully reflects the policy intention of interest rate policy to participate in activating the real estate market and promote a virtuous cycle in the real estate market.

　　Dong Ximiao also said that the sharp drop in the first phase of LPR after the Spring Festival sends a clear signal that monetary policy stabilizes growth and promotes development, further promoting the reduction of financing costs for the real economy, which in turn helps boost market confidence and expectations, and helps the economy achieve good results in 2024. The start and continued recovery.

　　"It is expected that in the next stage, the People's Bank of China will continue to lower policy interest rates, guide banks to lower deposit interest rates, promote the continued downward trend of LPR, further reduce the financing costs of the real economy, and create a more suitable monetary and financial environment for the accelerated recovery and sustained recovery of the economy," Dong Ximiao said. . (over)