In 2024, the real estate market will continue to change and adjust, and various policies will be introduced in many aspects such as loans, provident funds, and taxes and fees, so that home buyers can get benefits from multiple angles.
However, from the perspective of the current market policy, most of the existing policies are aimed at buyers who are ready to buy houses, and for buyers of stock houses, they often look forward to the policy. However, on July 22, after the announcement of the latest LPR in the market, many buyers of existing houses saw hope, and the decline in monthly mortgage payments also saw hope!
The second LPR cut this year is in line with market expectations
On July 22, the People's Bank of China released the latest market prime rate (LPR), of which the 1-year LPR is 3.35% and the LPR over 5 years is 3.85%. Both the 1-year and 5-year LPRs were lowered by 10 basis points compared to June.
This is also the second time this year that the LPR has been cut, and the first LPR cut this year will be in February 2024, when the five-year LPR was cut by 25 basis points, from 4.2% to 3.95%.
As we all know, changes in the LPR are closely related to home buyers' mortgages. For buyers who are ready to buy a house, if they use a commercial loan to buy a house, then the interest rate will be lowered in the process, and the buyer can immediately enjoy the current interest rate policy.
However, for buyers who have previously bought a house and have already started to repay the loan, it seems a little unfriendly. And the emergence of these policies will make buyers with existing mortgage interest rates feel heartbroken every time.
When these buyers buy a home, their property prices are at a high point, and mortgage interest rates are also high. Although after several rounds of adjustments, even the mortgage interest rate of the first home buyer is around 4.1%, and some will even be higher.
However, after this adjustment, buyers of existing mortgage interest rates can also see the light of day.
Existing mortgage rates also benefit from the focus on repricing dates
As we all know, for buyers of stock housing, they are looking forward to enjoying the same interest rate policy as current home buyers. However, judging from the current market policy, there is no separate adjustment for the interest rate of the existing housing loan.
However, after the LPR is lowered, the interest rate of the existing mortgage will also change. With most homebuyers' mortgages repriced at the beginning of the following year, the December 2024 LPR is particularly important. And in the long run, mortgage interest rates still have a downward trend and room to fall.
As can be seen from the chart above, taking first-time home buyers as an example, in January 2024, the interest rate of Shenyang's existing mortgage is generally around 4.1%, and after two rounds of interest rate cuts, the interest rate of existing mortgages will also be reflected in the repricing date.
Based on the current data, if the LPR in December 2024 is consistent with the LPR in July, then the monthly payment of home buyers will be about 129 yuan less per month, and the total repayment will be 31,000 yuan less. If, at the end of the year, the LPR continues to fall compared to now, the total monthly payments and repayments of home buyers will be reduced even more.
There have been calls for lower interest rates on existing mortgages, and many home buyers want to reduce the time difference and enjoy the latest interest rates immediately.
If the interest rate of the stock mortgage does not fall, then the number of buyers who repay the loan in advance in the market will also increase, and there may also be a situation of interruption of supply, I believe that these are not what the bank wants to see, so reducing the interest rate of the stock mortgage is also the trend of the times, which is something that everyone is looking forward to.
On the whole, the reduction of the LPR is a good thing for home buyers, which can save the cost of buying a house to a certain extent and promote the healthy development of the real estate market. Since the relevant policies point out that each city can independently define the mortgage interest rate according to the city's policies, buyers can also pay attention to the policies of their own city when buying a house and plan to buy a house in advance.