On September 29, the People's Bank of China issued an announcement and guided the self-discipline mechanism for market interest rate pricing to issue an initiative: all commercial banks should, in principle, uniformly implement batch adjustments to the interest rates of existing housing loans (including the first, second and above) by October 31, 2024. Subsequently, a number of banks said that they would announce specific operational guidelines and related matters through their official websites, WeChat official accounts, outlets and other channels on October 12, and complete the batch adjustment of existing mortgage interest rates by October 31.
On October 10, a number of banks issued a Q&A on the adjustment of the interest rate of the stock of housing, among which the Industrial and Commercial Bank of China released the news, clarifying the timetable and adjustment method of the adjustment of the bank's stock housing loan, and it was clear in the Q&A that if the customer's stock mortgage is priced at a floating interest rate and the current interest rate is higher than LPR-30BP, the mortgage interest rate will be adjusted to LPR-30BP (except for the second home loan in Beijing, Shanghai, Shenzhen and other regions), and the Industrial and Commercial Bank of China will determine that it will be adjusted on October 25.
At the same time, ICBC answered some common questions of customers and gave examples.
Q: My home loan is currently priced at a fixed/benchmark rate, can it be adjusted this time as well? How does it work?
A: Yes. For loans that are currently priced at a fixed/benchmark rate, you will need to actively apply for a variable rate conversion before making an existing interest rate adjustment. For example, if your first home loan is currently priced at a fixed interest rate with an interest rate of 4%, and you apply to switch to floating rate pricing on October 15, since the LPR for more than 5 years at the time of application for conversion is 3.85%, and the converted interest rate is LPR+15BP, the interest rate will be adjusted to LPR-30BP on October 25. For details of the conversion rules and operation methods, please refer to the subsequent announcement of our bank.
Q: My home loan is a second home loan, can I make an interest rate adjustment?
Answer: Eligible first, second and above commercial personal housing loans can be adjusted in batches. If your loan is not in Beijing/Shanghai/Shenzhen, the lower interest rate of the first and second home loans is the same, so you do not need to apply for "second to first set", and our bank will reduce the interest rate in batches. If your loan is in Beijing, Shanghai, Shenzhen and other regions and has met the criteria for the second set to the first home loan, you can contact the loan handling bank to apply for the "second set to the first set", and you can enjoy a more favorable interest rate for the first home loan after approval. Please consult the loan handling bank for details.
Q: How much can my mortgage interest rate be reduced after this rate adjustment? How much can I save in a month? Can you give an example?
A: If your mortgage is priced at a variable rate and the current interest rate is higher than LPR-30BP, your mortgage interest rate will be adjusted to LPR-30BP (except for second home loans in Beijing, Shanghai, Shenzhen and other regions). Example 1: Xiao Zhang has a house in a second-tier city, the current mortgage interest rate is LPR without points, that is, 3.85%, and the adjusted mortgage interest rate is LPR-30BP, assuming that the LPR for more than 5 years remains unchanged at 3.85%, and the repricing interest rate is 3.55% (=3.85%-0.3%), which is 30BP lower than before the adjustment, that is, 0.3%. Taking a mortgage with a loan amount of 1 million yuan, a 30-year term, and equal principal and interest as an example, the monthly repayment before the adjustment is about 4,688 yuan, and the monthly repayment after the adjustment is about 4,518 yuan, and Xiao Zhang can save about 170 yuan per month, and the total interest saving is about 61,000 yuan. Example 2: Xiao Li has a house in a first-tier city, the current mortgage interest rate is LPR+55BP (the first home loan interest rate policy at the time of loan issuance), that is, 4.4%, and the adjusted mortgage interest rate is LPR-30BP, assuming that the LPR for more than 5 years remains unchanged at 3.85%, and the interest rate after repricing is 3.55% (=3.85%-0.3%), which is 85BP lower than before the adjustment, that is, 0.85%. Taking a mortgage with a loan amount of 1 million yuan, a 25-year term, and equal principal and interest as an example, the monthly repayment before the adjustment is about 5,502 yuan, and the monthly repayment after the adjustment is about 5,033 yuan, Xiao Li can save about 469 yuan per month, and save about 140,600 yuan in interest in total.
Q: My mortgage current interest rate is LPR-40BP, can I still participate in this adjustment?
A: If your mortgage interest rate is equal to or lower than LPR-30BP, then you have enjoyed the prime rate under the current policy and are not within the scope of this adjustment. You can log in to our mobile banking - Loans - My Loans to check the current mortgage execution rate.
Q: My loan is in Beijing/Shanghai/Shenzhen, and it is a second home loan, how much can the mortgage interest rate be reduced?
Answer: If your loan is in Beijing/Shanghai/Shenzhen and does not meet the conditions of "second set to first set", according to the lower limit of the current second home loan policy, the adjusted interest rate value is: LPR-25BP outside Beijing 5th Ring Road, LPR-5BP inside Beijing 5th Ring Road; Shanghai Free Trade Zone Lingang New Area and Jiading, Qingpu, Songjiang, Fengxian, Baoshan, Jinshan District LPR-25BP, other areas LPR-5BP; Shenzhen has LPR-5BP under its jurisdiction.
Q: My friend's loans and I are both in the same city, and we are both first/second home floating rate loans, why is the interest rate different after the interest rate is lowered?
Answer: Except for the case where the loan is in Beijing/Shanghai/Shenzhen and is a second home loan, the interest rate of other eligible mortgages will be adjusted to LPR-30BP. Since the interest rate adjustment only adjusts the LPR plus or minus points, and does not adjust the loan repricing date, and the loan repricing date is different for different customers (it may be January 1 of the following year, or it may be the loan disbursement date), the loan interest rate may not be repriced during the batch adjustment, and the LPR value (pricing benchmark) of more than 5 years used for the loan has three possibilities: 4.2%, 3.95% and 3.85%, so that the interest rate of the existing housing loan may be different after the batch adjustment. On the loan repricing date, after the loan is repriced, the interest rate of the loan participating in this batch adjustment will be adjusted to the same level.
Q: Can I make an interest rate adjustment for my commercial mortgage?
Answer: The interest rate adjustment of the existing housing loan is only for commercial personal housing loans. Loans for commercial real estate (including commercial and residential buildings, shops, etc.) are not included in the scope of this adjustment.
Q: Will the bank charge a fee for adjusting the interest rate of the existing mortgage in batches this time?
Answer: In the process of adjusting the interest rate of the existing housing loan, the bank does not charge the relevant fees to the customer.
Source: CNR
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