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People's Bank of China WeChat public account
Two articles in a row
Adjust and optimize differentiated housing credit policies
Reduce interest rates on existing first home loans
Details are as follows
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People's Bank of China Notice of the State Financial Regulatory Administration on Adjusting and Optimizing Differentiated Housing Credit Policies
People's Bank of China Shanghai headquarters, branches in provinces, autonomous regions, municipalities directly under the Central Government, and cities with separate plans; the supervisory bureaus of the State Financial Regulatory Administration; There are commercial banks in various countries, Postal Savings Bank of China, and joint-stock commercial banks:
In order to implement the decision-making and deployment of the Party Central Committee and the State Council, adhere to the positioning that houses are for living, not for speculation, adapt to the new situation of major changes in the supply and demand relationship in the mainland real estate market, better meet the rigid and improved housing demand, and promote the stable and healthy development of the real estate market, People's Bank of China and the State Financial Supervision and Administration decided to adjust and optimize the differentiated housing credit policy. Notice of relevant matters is hereby given as follows:
1. For residential families who borrow money to purchase commercial housing, the minimum down payment ratio for commercial personal housing loans for the first home is not less than 20%, and the minimum down payment ratio for commercial personal housing loans for second homes is unified to not less than 30%.
2. The lower limit of the interest rate policy for the first set of commercial personal housing loans shall be implemented in accordance with the current regulations, and the lower limit of the interest rate policy for the second set of commercial personal housing loans shall be adjusted to not less than the market quotation rate of the corresponding term loan plus 20 basis points.
3. People's Bank of China. In accordance with the principle of city-specific policies, the agencies dispatched by the State Financial Regulatory Administration shall guide the self-discipline mechanism of provincial-level market interest rate pricing, and independently determine the minimum down payment ratio and interest rate floor of commercial personal housing loans for first and second homes in each city within its jurisdiction in accordance with the real estate market situation of each city within its jurisdiction and the regulatory requirements of the local government.
4. Banking financial institutions shall reasonably determine the specific down payment ratio and interest rate level of each loan in accordance with the minimum down payment ratio and lower interest rate limit determined by the self-discipline mechanism of interest rate pricing at the provincial level, combined with the institution's operating conditions, customer risk status and other factors.
People's Bank of China
State Financial Regulatory Administration
August 31, 2023
People's Bank of China Notice of the State Financial Regulatory Administration on Matters Related to Reducing the Interest Rate of the First Home Loan in Stock
People's Bank of China Shanghai headquarters, branches in provinces, autonomous regions, municipalities directly under the Central Government, and cities with separate plans; the supervisory bureaus of the State Financial Regulatory Administration; There are commercial banks in various countries, Postal Savings Bank of China, and joint-stock commercial banks:
In order to implement the decision-making and deployment of the Party Central Committee and the State Council, adhere to the positioning that houses are for living, not for speculation, guide commercial personal housing loan borrowers and lenders to adjust and optimize assets and liabilities in an orderly manner, and standardize the order of the housing credit market, the following notice is hereby issued on matters related to reducing the interest rate of commercial personal housing loans for the first set of housing in stock:
1. The stock of the first set of housing commercial personal housing loan refers to the first set of housing commercial personal housing loan issued by the financial institution and signed a contract but not issued before August 31, 2023, or other stock housing commercial personal housing loans whose actual housing situation meets the first housing standard of the city where the borrower is located.
2. From September 25, 2023, borrowers of the first commercial personal housing loan of the existing housing can apply to the lending financial institution to issue a new loan to replace the commercial personal housing loan of the first housing in stock. The interest rate level of the newly issued loan shall be determined by the financial institution and the borrower through independent negotiation, but the increase in the loan market quotation rate (LPR) shall not be lower than the lower limit of the interest rate policy for the first residential commercial personal housing loan in the city where the original loan was issued. The newly issued loan can only be used to repay the existing first home commercial personal housing loan, and is still included in the management of commercial personal housing loan.
3. Starting from September 25, 2023, borrowers of the first commercial personal housing loan of existing housing may also apply to the lending financial institution to negotiate changes to the interest rate level agreed in the contract, and the changed interest rate level of the loan contract shall comply with the provisions of Article 2 of this Notice.
4. Financial institutions should strictly implement relevant regulatory requirements, conduct penetrating and substantive reviews of the purpose of loans such as operating loans and personal consumption loans applied by borrowers, and clearly indicate risks. Intermediaries that assist borrowers in replacing existing commercial personal housing loans with operating loans and personal consumption loans in violation of regulations shall not cooperate, and insiders who engage in the above-mentioned acts shall be dealt with seriously.
5. All financial institutions should speed up the formulation of specific operating rules, do a good job in organization and implementation, improve service levels, respond to borrowers' applications in a timely manner, take convenient measures as much as possible to reduce borrowers' operating costs, and ensure that the relevant requirements of this notice are implemented in place.
6. All branches of the People's Bank of China and the State Administration of Financial Supervision shall immediately forward this Circular to local legal person financial institutions under their jurisdiction, supervise its implementation, and effectively maintain market order.
This notice is effective from September 25, 2023. If the previous relevant provisions are inconsistent with this notice, this notice shall prevail.
People's Bank of China
State Financial Regulatory Administration
August 31, 2023
On August 31, the relevant responsible persons of the People's Bank of China and the State Financial Supervision and Administration answered reporters' questions on the adjustment and optimization of housing credit policies
People's Bank of China. On August 31, the State Administration of Financial Supervision jointly issued the Notice on Adjusting and Optimizing Differentiated Housing Credit Policies and the Notice on Matters Related to Reducing the Interest Rate of the First Set of Existing Housing Loans. Relevant responsible comrades answered reporters' questions on policy adjustment.
Q: What is the background of the adjustment and optimization of differentiated housing credit policies?
A: The Politburo meeting on July 24 made it clear that in order to adapt to the new situation of major changes in the supply and demand relationship in the mainland real estate market, adjust and optimize real estate policies in a timely manner, and make good use of the policy toolbox according to the city's policies. On July 31, the executive meeting of the State Council proposed to introduce policies and measures conducive to the stable and healthy development of the real estate market according to different needs and different cities, and accelerate the study and construction of a new development model for the real estate industry.
In order to implement the decision-making and deployment of the Party Central Committee and the State Council, the People's Bank of China and the State Administration of Financial Supervision issued a notice to adjust and optimize the current differentiated housing credit policy, support local policies to make good use of the policy toolbox according to the city, guide the actual down payment ratio and interest rate of personal housing loans to fall, and better meet the rigid and improved housing demand.
Q: What is the focus of this adjustment and optimization of differentiated housing credit policies?
A: The first is to unify the lower limit of the national policy of minimum down payment ratio for commercial personal housing loans. No longer distinguish between cities that implement "purchase restrictions" and cities that do not implement "purchase restrictions", and the minimum down payment ratio of commercial personal housing loans for first and second homes is unified to not less than 20% and 30%.
The second is to adjust the lower limit of the interest rate policy for the second housing to not lower than the corresponding term loan market quotation rate (LPR) plus 20 basis points. The lower limit of the first home interest rate policy remains at not less than the corresponding term LPR minus 20 basis points.
All localities may, in accordance with the principle of city-specific policies, independently determine the minimum down payment ratio and lower interest rate for the first and second homes in their jurisdictions according to the local real estate market situation and regulatory needs.
Q: Why lower the interest rate on existing first home loans?
A: In recent years, the relationship between supply and demand in the mainland real estate market has undergone major changes, and both borrowers and banks have demands for orderly adjustment and optimization of assets and liabilities. The decline in the interest rate of existing housing loans can save interest expenses for borrowers, which is conducive to expanding consumption and investment. For banks, it can effectively reduce the phenomenon of prepayment and reduce the impact on bank interest income. At the same time, it can also reduce the space for illegal use of business loans and consumer loans to replace existing housing loans, and reduce hidden risks. In order to better adapt to the above new situation, the People's Bank of China and the State Administration of Financial Supervision clearly support and encourage banks to negotiate with borrowers to adjust the interest rate of the first set of housing loans in stock in accordance with the principles of marketization and rule of law.
Q: Which existing first home loans can apply for a reduced interest rate? How to apply?
A: Eligible stock first housing loans refer to commercial personal housing loans for stock housing that have been issued by financial institutions before August 31, 2023, have signed contracts but have not been issued, and the borrower's actual housing situation meets the first housing standards in the city where he or she is located.
For eligible existing housing loans, starting from September 25, 2023, borrowers can take the initiative to apply to the underwriting bank, and banks are also encouraged to provide borrowers with more convenient services by issuing announcements and batch processing. In terms of adjustment methods, the increase in the interest rate of housing loans agreed in the contract can be changed, or new loans issued by banks can be issued to replace existing loans. The specific interest rate adjustment range shall be determined by negotiation between the borrower and the borrower, but the adjusted interest rate cannot be lower than the lower limit of the interest rate policy for the first home loan in the city where the original loan was issued. The newly issued loans can only be used to repay existing loans, and are still included in the management of commercial personal housing loans.
People's Bank of China. The State Administration of Financial Supervision will pay close attention to market trends, guide banks and customers to conduct independent consultations in accordance with the principles of marketization and rule of law, orderly reduce the interest rate of existing housing loans, and maintain the order of market competition.
Source: "People's Bank of China" WeChat public account