This article is from WeChat public account: Finance Orange (ID: Me-Finance) , author: Hu Yanming, Chen Yueqin, original title: “The first set of minimum 4.4%! The mortgage interest rate is “discounted”, are you planning to buy a house? ”, header image from: Visual China
On May 15, the blockbuster policy on housing loans struck: the reference standard of the nation’s first commercial personal housing loan interest rate was lowered by 20 basis points.
At present, the national mortgage interest rate reference standard is generally LPR (loan market quotation rate) with a term of more than 5 years. Taking the latest April “LPR over 5 years” as a reference, after the cut, the minimum mortgage interest rate dropped from 4.6% to 4.4% .
The policy refers to the “Notice of the People’s Bank of China, China Banking and Insurance Regulatory Commission on Issues Concerning Adjustment of Differential Housing Credit Policies (Yin Fa [2022] No. 115)” issued by the Central Bank and China Banking and Insurance Regulatory Commission on May 15 (hereinafter referred to as the “Notice”) .
This is also on August 25, 2019, after the adjustment of the interest rate mechanism for commercial personal housing loans, the regulatory authorities changed the relevant regulations for the first time.
“Reducing the interest rate of housing loans reflects the intention to stimulate demand in the real estate market.” Yang Chang, head of the policy task force and chief analyst of the Zhongtai Securities Research Institute, said at the Politburo meeting on April 29 that “the epidemic must be prevented and the economic It is necessary to stabilize and develop safely”, especially the proposal to “promote the stable and healthy development of the real estate market”. At this stage, the demand for the real estate market is relatively weak. By reducing the interest rate of housing loans, it will help to reduce the cost of housing purchases and stimulate the marginal improvement of demand. .
1. The lower limit is adjusted, and the mortgage can be “discounted”
Before this adjustment, the policy on mortgages should go back to the adjustment of the mortgage interest rate mechanism in 2019.
On August 25, 2019, the People’s Bank of China issued Announcement No. 16 [2019], which stipulated that “the interest rate of the first set of commercial personal housing loans shall not be lower than the market quoted interest rate of the loan of the corresponding period, and the interest rate of the second set of commercial personal housing loans shall not be lower than The market quoted interest rate for the corresponding term loan plus 60 basis points.”
Regarding what is the market quoted interest rate of the corresponding term loan, because currently LPR has two terms of 1-year term and 5-year term.
There are directly corresponding benchmarks for personal housing loan interest rates with terms of 1 year and more than 5 years. The benchmark for personal housing loan interest rates within 1 year and 1 year to 5 years can be freely selected by the lending bank between the two terms.
Because most of our mortgage loans are medium and long-term loans, most of them refer to “LPR with a term of more than 5 years”.
According to the regulations and LPR prices at the time: the interest rate of the first set of personal housing loans issued nationwide shall not be lower than the corresponding term LPR (4.85% according to the LPR of more than 5 years on August 20, 2019) ; the interest rate of the second set of personal housing loans shall not be lower than the corresponding term LPR Less than the corresponding term LPR plus 60 basis points (calculated as 5.45% based on the LPR of more than 5 years on August 20, 2019) .
LPR is announced once a month, usually on the 20th (if it is a holiday, it will be postponed to a working day) , and it will fluctuate due to the impact of the macro environment and capital environment, sometimes high and sometimes low.
From 2019 till now, LPR has been going down. As of April 20 this year, the 1-year LPR was 3.7%, and the 5-year LPR was 4.6%.
This “Notice” has adjusted the above pricing policy: For households who take loans to buy ordinary self-owned houses, the lower limit of the interest rate of the first commercial personal housing loan is adjusted to not lower than the market quotation interest rate of the corresponding term loan minus 20 basis points. The lower limit of the interest rate policy for commercial personal housing loans for two sets of housing shall be implemented in accordance with the current regulations.
That is to say, after the “Notice” was released, the current national policy is: the mortgage loan for the first home is “not less than 5-year LPR-20BP”, and according to April 20, the LPR for more than 5 years is 4.6%, and the current lower limit of interest rate It is 4.4%, and the interest rate for the second home is “not less than 5-year LPR+60BP” is 5.2%.
“The original lower limit of the first set of national-level policies was 4.6%, and Document No. 115 (Note: “Notice”) was reduced to 4.4%, which is equivalent to a 50% discount on the lower limit of interest rates . Zhang Xu, chief fixed income analyst at Everbright Securities, said.
Based on the loan amount of 1 million yuan, the term of 20 years, and the repayment of equal principal and interest, the interest rate is reduced by 20 basis points. According to the original minimum interest rate of 4.6%, the monthly repayment is 6,380.6 yuan; if it is changed to 4.4%, the monthly repayment is 6,272.64 yuan. , the average monthly monthly payment can be reduced by about 108 yuan. The accumulative repayment amount has been reduced from 1.53 million yuan to 1.505 million yuan, and the interest expense has been reduced by 25,000 yuan in 20 years.
If the price of the “LPR with a maturity of more than 5 years” announced on May 20 is lowered, then the mortgage interest rate may be lower than 4.4%.
According to the “Notice”, the interest rate for the second set of housing remains unchanged at the lowest 5.2%, but Zhengzhou, Suzhou and other places have recently issued documents to relax the loan policy, such as the relaxation of the direct first set certification or the relaxation of the link with the second set, etc., and the direction has been reduced. Second home interest rate.
2. Each region implements policies according to the city
However, the “Notice” also stipulates that on the basis of the unified lower limit of loan interest rates across the country, the dispatched offices of the People’s Bank of China and the China Banking and Insurance Regulatory Commission will guide the provincial market interest rate pricing self-discipline mechanism in accordance with the principle of “implementing policies according to the city”. Changes in the urban real estate market situation and the regulation requirements of the city government, independently determine the lower limit of the interest rate of commercial personal housing loans for the first and second housing in each city within the jurisdiction.
Zhang Xu said that my country’s real estate market has obvious regional characteristics, and the determination of personal housing loan interest rates follows the principle of “policy based on the city”, and adopts a three-tier pricing mechanism of the country, the city and the bank.
At the national level, after the “Notice” is released, the national lower limit will be adjusted.
At the city level, Zhang Xu believes that the provincial branches of the central bank guide the provincial self-discipline mechanism in accordance with the principle of “policies tailored to the city”, and determine the lower limit for each city under their jurisdiction on the basis of the lower limit of national policies. This is the lower limit to be observed within the city limits. In practice, most cities have directly adopted the national lower limit without any additional requirements.
At the bank level, Zhang Xu analyzed that the bank determined the interest rate pricing rules based on its own business conditions, customer risk status and credit conditions, etc., and reasonably determined the specific value of each loan on the basis of the lower limit of the interest rate policy of each city. Fully market-based business decisions.
Yang Chang also mentioned that city-specific policies are conducive to precise regulation . The policy emphasizes that “each city independently determines the lower limit of the commercial personal housing loan interest rate for the first and second housing in each city within its jurisdiction”. For some cities with a large population inflow and rigid housing demand, they can take different measures according to their own conditions. The way of adding points is conducive to the precise regulation of demand release and prevents the pressure of rapid upward price rise.
3. The national housing loan has begun to drop in price
Before the announcement of this “Notice”, many city banks across the country have voluntarily lowered their mortgage interest rates this year . On April 14, Zou Lan, director of the Financial Market Department of the People’s Bank of China, said that the recent reduction in mortgage interest rates mainly occurred at the bank level. Since March, due to weakening market demand, banks in more than 100 cities across the country have voluntarily lowered their mortgage interest rates by an average of 20 to 60 basis points based on market changes and their own business conditions.
Taking Guangzhou as an example, in the first ten days of May, most banks in Guangzhou implemented the interest rate standard of about 5.2%-4.8% for the first home loan; at the same time, the minimum of high-quality customers of some banks and some foreign banks has dropped to the minimum of 4.6%. Wire. For second homes, most banks’ mortgage rates range from 5.2% to 5.4%.
A CCB personal loan person calculated that the current five-year interest rate quoted in the Guangzhou market is LPR+80bp. If it is lowered by 20bp, the buyer can pay 124.2 yuan less per month for a mortgage of 1 million yuan, and the interest will be reduced by 44,700 yuan; and 5 million yuan. For a 30-year mortgage, the monthly repayment is 621 yuan less, and the interest is correspondingly reduced by 223,600 yuan.
The CCB personal loan person also reminded that the “Notice” is only for new home buyers, and the existing home loan (the home loan that is already in the monthly payment) has not changed.
In addition to lowering mortgage interest rates, many regions have also lowered the proportion of first home mortgages. For example, at the end of April in Langfang, Hebei, the down payment ratio of a bank’s first home loan was reduced from 30% to 20%.
According to the mainstream housing loan interest rate data in key cities released by the Shell Research Institute on April 20, the mainstream first-home loan interest rate in the 103 key cities it monitored was 5.17%, and the second-home loan interest rate was 5.45%, down 17 basis points from the previous month, respectively. 15 basis points; the average lending cycle in April was 29 days, 5 days shorter than the previous month.
However, from the national data, housing loan growth is still sluggish. On May 13, the April financial data released by the central bank showed that the national housing loan did not increase but fell in April, a decrease of 60.5 billion yuan, an increase of 402.2 billion yuan less than in April 2021.
This is the second time in three months that medium and long-term loans representing residential mortgage loans have decreased, and the decline is widening. In February, this value decreased by 45.9 billion yuan, a year-on-year decrease of 457.2 billion yuan, which is the first negative growth of household long-term loans since statistics began in 2007. The month-on-month increase of 373.5 billion yuan in March reversed the decline of the net decrease in February, but still a decrease of 250.4 billion yuan year-on-year.
Yang Chang believes that reducing the interest rate of housing loans will help eliminate the interest rate scissors gap. Since January 2021, the average interest rates of first- and second-home loan markets have continued to rise. Although they have fallen recently, they are still higher than the 2021 level. It should be noted that the interest rate of personal housing loans is still significantly higher than the weighted average interest rate of general loans. Compared with general corporate loans, personal housing loans have better asset quality and lower repayment risk, but bear a higher risk premium. . Therefore, reducing the interest rate of housing loans at this stage is conducive to changing the scissors difference between the interest rates of different quality assets.
Zhang Dawei, chief analyst of Centaline Real Estate, believes that from the perspective of direct policy impact, this policy is not a direct interest rate cut, because the previous minimum interest rate level of 4.6%, very few cities in the country can implement this standard, and not all of them are implemented, only for the first set of Mortgage. It still depends on the local regulations.
This article is from WeChat public account: Finance Orange (ID: Me-Finance) , author: Hu Yanming, Chen Yueqin
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