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Recently, China's four major banks, namely Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China and China Construction Bank, announced that they will focus on adjusting the interest rate of existing first home loans on September 25, without customers having to actively submit applications. This adjustment involves a series of policy changes, including loan disbursement time, adjustment rules, adjustment methods, etc. We'll take a closer look at this important change below.
After a number of banks successively expressed their determination to reduce the interest rate of the first home loan in stock, the banks began to interpret this policy in detail and explain the adjustment method of the interest rate of the existing housing loan. ICBC, ABC, Bank of China and China Construction Bank issued an announcement on September 7, clarifying the operating rules for reducing the interest rate of the first home loan in stock. This announcement not only clarifies the adjustment rules for the interest rate of existing housing loans, but also clarifies the adjustment method and processing time.
In terms of adjusting the rules, the four banks have clarified that they will implement LPR pricing basis for existing first set of personal housing loans issued between May 15, 2022 and August 31, 2023. The interest rate of these loans can be adjusted to the lower limit of the national first home loan interest rate policy, that is, the corresponding term LPR-20BP. If the lower limit of the first home loan interest rate policy in the city where the original loan is issued is higher than LPR-20BP, then the lower limit of the policy at that time will be implemented. For loans issued before May 15, 2022, the LPR corresponding to the original loan contract term or the lower limit of the first home loan interest rate policy at that time will be implemented.
ICBC said that for the floating rate existing housing loans that implemented the interest rate policy of the first home loan in the city where the original loan was issued and are currently priced at LPR, it will take the initiative to make unified batch adjustments in accordance with the new rules. If you have special needs, you can contact the original loan service bank. Agricultural Bank of China made it clear that they will take the initiative to carry out batch reduction from September 25, 2023, without the need for customers to apply for it themselves. Bank of China also said that for eligible existing first home loans, customers do not need to submit an application, and adjustments will be made through batch adjustment. CCB plans to make uniform adjustments to eligible variable-rate loans on September 25, 2023, and the new interest rate will take effect on the same day.
In summary, this policy adjustment will bring certain benefits to many first-time home buyers and loan customers, and also bring new variables to the real estate market. Different banks have slightly different adjustment methods, so loan customers need to read the relevant announcements carefully to understand their loan situation, so that they can enjoy the preferential interest rate in time after the adjustment takes effect. This adjustment will undoubtedly have a certain impact on the entire real estate market, and we will closely monitor its subsequent development.