China News Service, February 22 (China News Financial Reporter Zuo Yukun) The interest rate cut, known as the “most drastic” in history, has been implemented quickly.

  On February 20, the People's Bank of China authorized the National Interbank Funding Center to announce the latest loan market quoted interest rate (LPR). The 1-year LPR remained unchanged at 3.45%, and the 5-year and above LPR was reduced by 25 basis points, from 4.2% to 3.95%.

  What's special is that this is an asymmetric interest rate cut. The reduction in LPR over 5 years is the largest drop since the anchor change in 2019, and the mortgage interest rate is further approaching the lowest level in history.

  Data map: Bank counter clerk at work.

Photo by Ai Qinglong

First home loan interest rates in more cities have entered the "3 era"

  "This time the LPR has been lowered by 25 basis points (BP) at one time, which is the largest reduction in history. The largest reduction in the past was only 15 basis points." said Li Yujia, chief researcher of the Housing Policy Research Center of the Guangdong Provincial Institute of Urban Planning.

  Chen Wenjing, market research director of China Index Research Institute, further pointed out that after the reduction, the current lower limit of mortgage interest rates for first and second home purchases will be reduced to 3.75% (LPR-20 basis points for more than 5 years) and 4.15% (LPR + 20 basis points for more than 5 years) respectively. basis points), further approaching historical lows, and mortgage interest rates in some cities have dropped to historical lows.

  According to monitoring data from the Shell Research Institute, the average interest rate for first-home mainstream mortgages in 100 cities was 3.84%, 2BP lower than the previous month; the average interest rate for second-home mainstream mortgages was 4.41%, the same as last month.

As of mid-January this year, first-home loan interest rates in 60 of 100 cities have entered the "3 era"; after this adjustment, first-home loan interest rates in more cities may be lower than 4%.

  Taking Beijing, which currently has the highest mortgage interest rates, as an example, reporters from Sino-Singapore Finance consulted the personal loan departments of China Construction Bank, Agricultural Bank of China, etc. on February 21, and they all said that the adjustment of mortgage interest rates has "succeeded" today: in the six districts of the city (Beijing’s Dongcheng District, Xicheng District, Chaoyang District, Haidian District, Fengtai District and Shijingshan District) The interest rate for first-time home loans is adjusted to 4.05%, and the second-home loan interest rate is 4.55%; the interest rate for first-time home loans in the six non-urban districts is adjusted to 3.95%, and the second-home loan interest rate is adjusted to 3.95%. The set adjustment is 4.5%.

  In addition, many banks in Shanghai have confirmed that they have lowered the mortgage interest rate based on LPR, with the interest rate for first-home loans raised to 3.85% and the interest rate for second-home loans to 4.25%.

  "The possibility of mortgage interest rates falling below 3.5% in some cities, especially small and medium-sized cities, is very high. The (commercial) mortgage interest rates are constantly approaching the provident fund loan interest rate (3.1%). Applying for a mortgage loan has become a cost-effective thing. In these key cities The housing loan market will continue to be active," said Yan Yuejin, research director of E-House Research Institute.

   Beijing residence.

Photo by Zuo Yukun, China News Service

Existing mortgages also have an impact

  In addition to the decline in new mortgage interest rates, there is also the possibility of another reduction in existing mortgage interest rates.

But whether you can definitely save money and when you can start saving money vary from person to person.

  First of all, for home buyers who previously gave up switching to LPR and chose fixed interest rates, the mortgage interest rate has nothing to do with the adjustment of LPR, and the mortgage loan will not change; while for mortgage customers with floating interest rates, the mortgage interest rate does not adjust immediately with the decrease of LPR, but It is related to the repricing date of the mortgage interest rate.

  Specifically, some loan interest rates will be readjusted at the beginning of each year.

That is, the repricing cycle agreed between home buyers and the bank is one year, and the repricing date is January 1 of each year. This reduction in the 5-year LPR will not affect the amount of the mortgage repayment every month this year.

It will be January 2025 and then adjusted based on the latest LPR in December 2024.

  There are also some loan interest rates whose repricing date is the loan issuance date.

For example, for existing mortgage customers whose repricing date is February 21, the reduction in mortgage interest rates will take effect immediately.

However, for specific circumstances, please contact the loan agency for consultation.

  On the social platform, some netizens shared their luck in catching up with this adjustment: "According to my loan contract, the annual interest rate adjustment is based on the LPR on the day before the loan date, and we loaned on February 21, which happened to be The interest rate for the next year can be adjusted according to the latest LPR on February 20. The news was released in the morning and the display in the APP changed in the evening, which was indeed an unexpected surprise."

  Even if it doesn't take effect immediately for everyone, this interest rate change has brought a good mood to other existing mortgage customers in advance.

Ms. Guo, who took out a loan to buy a house in Beijing, is one of them.

  "I started repaying my mortgage in July 2023. The LPR at that time was 4.2%, plus 55 basis points, which is an interest rate of 4.75%. Although I am not at the top, I am still under a lot of pressure. I have been paying close attention to the mortgage situation. New policy." Ms. Guo said.

  After this LPR adjustment, Ms. Guo, who has a monthly payment of about 15,000 yuan, immediately made a rough calculation and found that she could pay about 400 yuan less in monthly loan repayments.

"My repricing date is April 21st, which is very close. I'm very happy."

  "In recent years, the lower limit of interest rates for first-time mortgages in Beijing has been LPR + 55 basis points, and the lower limit for second-home loans has been LPR + 105 basis points. An adjustment was made in mid-December last year, but it was for new loans and existing loans. It is still relatively stable, and this time it has finally fulfilled the expectations of existing customers." A real estate related person in Beijing told reporters.

  He also revealed that in the past two days, many existing customers have inquired about changing the repricing date in order to enjoy the discount earlier.

"Some customers made changes in mobile banking as soon as they learned about the adjustment, and after successful payment, the next month's monthly payment can be reduced; but some customers reported that they can change the time, but it will not take effect until next year, which is meaningless. "

  Since the fourth quarter of last year, relevant departments have frequently expressed support for the real estate market. The industry believes that the interest rate cut at the beginning of the year reflects the consideration of monetary policy to move forward and stabilize the start.

  "This LPR reduction will benefit a wider group of people, further reduce the cost of home purchase, encourage home buyers with home purchase needs to enter the market, and also lay the foundation for the property market to sprint into the Indian Spring." Wang Xiaoqiang, chief analyst of Zhuge Data Research Center, believes that with the end of the Spring Festival holiday, home purchase The pace of investors entering the market has accelerated and the LPR has been lowered. It is expected that the market transaction scale will see a significant increase in March.