On October 17, Tao Ling, deputy governor of the People's Bank of China, introduced the implementation of a package of real estate financial policies at the press conference of the State Council New Office.
The first policy is to reduce the interest rate on existing housing loans. Reducing the interest rate of existing housing loans is a specific measure to implement the decisions and arrangements of the CPC Central Committee, stand firm on the position of the people in financial work, and benefit people's livelihood. Regarding the progress of the work, on September 29, the People's Bank of China issued an announcement to improve the pricing mechanism of commercial personal housing loan interest rates. On the same day, the People's Bank of China (PBoC) issued a self-discipline initiative to guide the self-discipline mechanism for market interest rate pricing, and commercial banks also issued announcements. On October 12, major commercial banks issued operational rules. At present, commercial banks are working overtime to revise contracts and systems, and make various preparations. It is expected that most of the existing housing loans will be adjusted in batches on October 25, which means that everyone can check the adjustment results through the designated channels of the lending bank on October 26. Some small and medium-sized banks may complete the adjustment a little later, and it is generally expected that all of them will be completed by October 31.
In order to facilitate the processing, the vast majority of borrowers do not need to go to bank outlets, among them, for the housing loan is a floating interest rate, the borrower does not need to apply, and the commercial bank will adjust it in batches, and this part of the stock of housing loans accounts for more than 9%. For the mortgage with a fixed interest rate, the borrower can apply through the online banking and mobile banking of the commercial bank, and there is no need to go to the bank branch. For those who obtain housing loans from small and medium-sized banks, because the network of some small and medium-sized banks is not very complete, the borrower may need to go to the bank branch to handle it. For details, please pay attention to the announcement of the lending bank.
Borrowers are also generally concerned about what the mortgage interest rate will be after the policy adjustment. The mortgage interest rate is made up of the loan prime rate and the markup. According to the requirements of this policy, the adjustment is the increase range, for the stock of housing loans with a increase rate higher than -30 basis points, the increase range will be uniformly reduced to -30 basis points. For example, the minimum increase in the interest rate of the first home loan in Beijing in the early stage was 55 basis points, and the minimum increase point is reduced to -30 basis points, which means that the mortgage interest rate has been reduced by 85 basis points. Beijing's minimum increase for second home loans was 105 basis points in the early stage, and according to the lower limit of the city's interest rate, the minimum increase was reduced to -5 basis points, and the mortgage interest rate fell by 110 basis points. Outside the Fifth Ring Road, the decline will be even greater.
How much can I save on the mortgage after the adjustment of the interest rate of the existing mortgage? It is estimated that the interest rate of the existing housing loan will drop by about 0.5 percentage points on average, and the overall interest expense will be saved by 150 billion yuan, benefiting 50 million households and 150 million residents. Specific to individuals and families, according to the calculation of commercial banks, and then taking Beijing as an example, if the original mortgage interest rate is 4.4% and the interest rate is 3.55% after the interest rate is adjusted, then the 1 million yuan, 25-year equal principal and interest mortgage can reduce the monthly payment of 469 yuan per month, saving a total of more than 140,000 yuan in interest expenses. Because there are many operational details of the adjustment of the interest rate of the stock mortgage, involving different borrowers in different regions, please refer to the policies and operating rules in the specific handling.
The second policy is to standardize the minimum down payment ratio for mortgages to 15%. The policy is designed to better support the demand for rigid and improved housing. After the policy was released on September 24, the head office of the People's Bank of China instructed local branches to implement policies according to the city and cooperate with the city government to implement it quickly. At present, except for the three first-tier cities of Beijing, Shanghai and Shenzhen, which have independently adopted differentiated arrangements, the vast majority of cities in the country no longer distinguish between the first and second houses, and the minimum down payment ratio is uniformly adjusted to 15%. It can be noted that many cities have simultaneously adjusted real estate control policies such as purchase restrictions and taxes, and market confidence and sales have improved.
The third policy is to extend the term of two real estate finance policies. On September 29, the People's Bank of China (PBOC) and the State Administration of Financial Supervision (SAMR) jointly issued an adjustment notice. The first is to adjust the "16 Financial Articles" in November 2022. The original regulations were that for real estate development loans and trust loans that would expire within the next six months, they were allowed to be extended for one year, and the loan classification could not be adjusted. This policy, which is conducive to stabilizing the financing of real estate enterprises and improving the financial situation of the industry, was originally scheduled to expire at the end of 2024, but this time the policy will be extended to the end of 2026. The second is to adjust the January 2024 Notice on the Management of Operating Property Loans. The original stipulation was that for real estate enterprises with standardized operations and good development prospects, the operating property loans issued by national commercial banks could be used to repay the real estate-related loans and bonds of the enterprises and groups. This policy, which eases the use of loans and helps real estate companies improve their financial position, was originally scheduled to expire at the end of 2024, but this time the policy will also be adjusted to expire at the end of 2026.
The fourth policy is to optimize the refinancing policy for affordable housing. Affordable housing refinancing is a structural monetary policy tool. On May 17, the People's Bank of China (PBoC) announced the establishment of a 300 billion yuan re-loan for affordable housing to encourage banks to issue commercial loans to support the acquisition of unsold commercial housing for sale or rent. The purpose of this policy is to promote the destocking of existing commercial housing. From the perspective of implementation, the People's Bank of China cooperated with the Ministry of Housing and Urban-Rural Development to set up a special working group to promote local governments to increase their work under the urban real estate financing coordination mechanism.
On September 24, according to the practical needs of the early stage, in order to further enhance the market-oriented incentives for banks and acquisition entities, the policy was improved, and the proportion of re-lending funds provided by the People's Bank of China was increased from the original 60% to 100%, so as to further support the willingness to increase the acquisition of stock commercial housing and accelerate the destocking of the real estate market. On September 29, the People's Bank of China (PBoC) officially issued a notice that commercial banks will apply for refinancing from October, and commercial banks have already made declarations recently. With the joint efforts of all parties, further positive progress will be made in the acquisition of stock housing.
The fifth policy is to support the acquisition of land stock of real estate enterprises. The People's Bank of China, in conjunction with relevant departments, is stepping up research to allow policy banks and commercial banks to issue loans to qualified enterprises and purchase land for real estate enterprises, and the People's Bank of China will provide necessary special re-lending support.
Tao Ling said that in general, the People's Bank of China has recently introduced a package of financial policies such as RRR cuts and interest rate cuts, which, together with the above-mentioned real estate financial policies, will continue to have a positive effect on boosting confidence and stabilizing expectations.
(This article is from Yicai)
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