Before the Spring Festival holiday, first-tier cities such as Beijing, Shanghai, and Shenzhen have successively relaxed property market policies to pave the way for the arrival of Indian Summer.

In the first week after returning to work during the Spring Festival, the central bank’s interest rate cut policy was introduced, taking the lead in giving the real estate market a shot in the arm!

　Beijing first home loan interest rate drops to 3.95%

　　On February 20, the People's Bank of China authorized the National Interbank Funding Center to announce that the 1-year LPR was 3.45%, unchanged; the 5-year and above LPR was 3.95%, 25 basis points lower than the previous value. This is not only 2024 The first interest rate cut in 2018 was the largest single reduction in LPR over 5 years in history.

　　Judging from the previous quotations, since August 2019, LPR has changed a total of 8 times, of which 5 times have achieved a linkage reduction between the MLF interest rate and the LPR quotation; 3 times, with the help of the MLF interest rate unchanged, Measures such as reserve requirement ratio cuts and deposit interest rate pricing reforms have reduced banks' comprehensive financing costs, thereby achieving varying degrees of LPR reductions. The magnitude of a single reduction is generally around 5-15 basis points.

　　After this reduction, the current lower interest rates for first-time and second-home mortgages have been 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, further approaching the historical low. point.

　　A staff member of the housing loan department of a commercial bank in Chaoyang, Beijing, also said that the interest rate for first-home loans in the six districts of the city has been adjusted to 4.05%, and for second-home loans is 4.55%.

In addition, the current interest rate for first-home mortgages outside the six districts of the city has been adjusted to 3.95%, and for second-home mortgages to 4.5%.

　　The monthly payment for a loan of RMB 1 million will be reduced by 144.8 yuan.

　　As loan interest rates fall, many home buyers are beginning to wonder whether to take advantage of the situation and repay their loans in advance.

Calculated based on a commercial loan limit of 1 million yuan, a 30-year loan, and equal repayment of principal and interest, the LPR dropped by 25 basis points this time, the monthly payment was reduced by 144.8 yuan, and the cumulative monthly payment for 30 years was reduced by 52,200 yuan.

　　However, it is not a cost-effective deal to repay the loan in advance if you only consider the widening spread between the financial management yield and the mortgage interest rate. It also needs to be evaluated from multiple factors such as the repayment period, repayment method, and the number of repayment periods.

　　First of all, according to the relevant announcement requirements issued by the central bank, starting from March 1, 2020, financial institutions should negotiate with existing floating rate loan customers to choose one of two interest rate pricing methods: fixed interest rate or floating interest rate, that is, LPR + plus points (plus points can be negative).

Among them, the LPR quotation is announced by the central bank once a month, and the point is determined by the commercial bank based on comprehensive conditions.

　　In 2019, in order to improve the representativeness of loan market quoted interest rates, the types of banks that quote loan market quoted interest rates will be added to the original national banks, including urban commercial banks, rural commercial banks, foreign banks and private banks. The number of banks involved will be expanded from 10 to 18 homes.

　　Normally, if you choose a fixed interest rate, the annual repayment interest rate remains unchanged until all the loans are paid off; but if you choose a floating interest rate, the mortgage interest rate is priced based on LPR + basis points (1 basis point is 0.01%) Post composition.

　　If the loan is not a fixed-rate loan but a floating-rate loan, the actual execution interest rate will change according to the adjustment of the LPR in the repricing cycle stipulated in the contract.

On each interest rate repricing date, the interest rate level is calculated and determined by the LPR of the corresponding period in the last month and the point value.

　　In other words, for those who are about to sign a mortgage contract, it will be more cost-effective to sign a contract after the five-year LPR drops this month than last month.

　　However, it is worth noting that after the LPR adjustment, the user’s mortgage interest rate will not be adjusted immediately.

Generally speaking, the mortgage interest rate needs to wait until the next repricing date or the loan issuance date (different banks have different policies, and users can choose when signing the loan agreement) for implementation.

　The "Little Indian Spring" market may gradually start

　　Since the beginning of 2024, favorable policies have continued to be implemented, and the signal significance is obvious.

As residents' work and home purchases gradually get back on track after the Spring Festival, policy effects are expected to be further evident in first-tier and core second-tier cities.

　　Chen Wenjing, market research director of the China Index Research Institute, believes that at the beginning of 2024, the central bank lowered the re-lending and re-discount rates by 0.5 percentage points, releasing about 1 trillion yuan of medium- and long-term low-cost funds. At the same time, major banks also lowered their interest rates at the end of last year. By lowering medium- and long-term deposit rates, these measures effectively reduced banks' medium- and long-term liability costs, which to a certain extent contributed to the decline of LPR.

　　After this significant reduction in LPR with a maturity of more than 5 years, the cost of home ownership for home buyers has dropped, which is expected to strengthen the effect of policies in core cities, and the "Little Indian Spring" market may gradually begin.

However, it is worth noting that the high base effect gradually emerged in the same period last year. In the next 2-3 months, the sales volume of both new and second-hand houses may be overall weaker than the same period last year.

　　Text/Yang Haoyue