There are five more lower interest rates for the first home loan, and most of the 70 cities have entered the "3 era"

Only 10 days have passed in 2024, and many cities across the country have lowered the interest rate of the first home loan in stages under the guidance of the principle of "city-specific policies".

According to incomplete statistics from public information, Yicai found that among the 70 large and medium-sized cities in the country, the lower limit of the interest rate of the first set of commercial personal housing loans in more than seventy percent of the cities has reached the "3 prefix", and the interest rate of the first home loan in most cities has hit a record low.

Behind the intensive reduction of mortgage interest rates

In January, various localities intensively lowered the interest rate of the first home loan, and the incomplete statistics of the first financial network showed that in the past 10 days, at least 5 cities have lowered the interest rate of the incremental first home loan.

Among them, the Foshan Real Estate Association said that according to the latest news from commercial banks, Foshan has applied for the implementation of the policy of canceling the lower limit of the interest rate of the first set of commercial personal housing loans in stages, which will be officially implemented on January 1, 2024. Some analysts predict that the interest rate of personal housing loans in Foshan will fall to between 3.6% ~ 3.8%.

On the evening of January 1, the Dongguan Municipal Bureau of Housing and Urban-Rural Development announced through the official platform "Dongguan e-subscription" that the lower limit of the interest rate of commercial personal housing loans for the first housing will be cancelled in stages from now on, and the specific housing loan interest rates will be determined by each commercial bank in accordance with the principles of marketization and legalization. This also means that the interest rate of the first home loan issued by Dongguan will break through the lower limit LPR (loan prime rate) -20BP. It is understood that a number of large banks in Dongguan have lowered the interest rate of the first home loan to a minimum of 3.8%, that is, LPR-40BP (basis points).

In addition, according to the official website of the Hohhot Municipal Government, from January 1, 2024, the lower limit of the interest rate increase on commercial personal housing loans for the purchase of the first house in Hohhot will be LPR-40BP. After the adjustment, the minimum interest rate for the first home loan is 3.8%, which is the lowest level of the mortgage interest rate in Hohhot in recent years.

At the same time, the official website of the Jiujiang Municipal Government also announced that from January 1, 2024, the lower limit of the interest rate of commercial personal housing loans for the first housing in the city will be adjusted to LPR-40BP. If the sales price of newly built commercial residential buildings rises for three consecutive months in the subsequent assessment period (from the end of the previous quarter to the second month of the current quarter), the implementation of the national unified lower limit of the commercial personal housing loan interest rate for the first housing will be resumed from the next quarter.

On January 9, Nanjing, a new first-tier city, also began to act, and the interest rate on the first home loan was lowered from LPR-20BP to LPR-30BP, that is, 3.9%, from the "4" era to the "3" era.

According to the Notice on Establishing a Long-term Mechanism for Dynamic Adjustment of the Interest Rate Policy for Personal Housing Loans for Newly Issued First Housing Units, jointly issued by the People's Bank of China and the former China Banking and Insurance Regulatory Commission, the city governments can conduct a dynamic assessment of the changes in the sales prices of newly built commercial residential buildings in the local area at the end of each quarter, from the end of the previous quarter to the second month of the current quarter. For cities where the sales price of newly built commercial residential buildings has decreased for three consecutive months month-on-month and year-on-year during the assessment period, the lower limit of the interest rate of commercial personal housing loans for the first housing will be relaxed in stages.

Mortgage interest rates across the country are already at historic lows

According to incomplete statistics from public information, CBN found that among the 70 large and medium-sized cities in the country, the lower limit of the first home loan interest rate in 37 cities has been less than 4%, which has come to the "3" era, between 3.9% and 3.6%, that is, LPR-30BP to LPR-60BP.

Among them, there are 4 cities with the lower limit of LPR-60BP. For example, according to the official website of the Guangxi Zhuang Autonomous Region Branch of the People's Bank of China on October 30, 2023, except for the lower limit of the mortgage interest rate in Yulin City, the lower limit of the mortgage interest rate in Guangxi was lowered to LPR-50BP, and the lower limit of the first home loan interest rate in the other 13 districted cities was lowered to LPR-60BP (3.6%), which is at a historical low, including Nanning, Guilin, Beihai, etc.

According to statistics, from October 9 to 13, 2023, the interest rates of new mortgage loans for the first and non-first homes in Guangxi were 3.66% and 4.46% respectively, down 238BP and 155BP respectively from the beginning of 2022.

"The current mortgage interest rate is already very low, and if you have a plan to buy a house, you can take this opportunity to start. A real estate agent in Guilin said to Yicai.

In addition, 15 of the above 70 cities have a first home loan interest rate of 4%, that is, LPR-20BP, such as Hangzhou, Chengdu, Hefei, etc. Only the first home loan interest rate in the four first-tier cities of Beijing, Shanghai, Guangzhou and Shenzhen is above 4%, of which the lower limit of the first home loan interest rate in Beijing is 4.2%, that is, LPR, and the lowest in Shanghai, Guangzhou and Shenzhen is 4.1%, that is, LPR-10BP.

"Overall, mortgage rates are at historic lows, the lowest since we started monitoring data in January 2019. Low interest rates, combined with a lower down payment policy, will help lower the entry threshold and loan cost of housing demand, further promote the release of housing demand, and play a positive role in repairing the market. Liu Lijie, a market analyst at the Shell Research Institute, told CBN.

According to the previous data of the Shell Research Institute: in the whole year of 2023, the mainstream interest rate of the first housing loan in the country will drop by 24BP, from 4.10% to 3.86%, and the second set will drop by 50BP, from 4.91% to 4.41%.

For 2024, Liu Lijie analyzed that the current real estate market is in the process of adjustment, and housing prices are also under adjustment pressure, and some cities with greater housing price adjustment pressure may further reduce the interest rate of the first home loan.

Li Yujia, chief researcher of the Guangdong Provincial Housing Policy Research Center, analyzed the first financial news, on the one hand, judging from the situation in recent months, the momentum for rigid demand and improved housing purchase is still insufficient, in this case, reducing the interest rate of the first home loan may become a more common choice in 2024; on the other hand, in view of the three cuts in the deposit rate in 2023, and the LPR of more than 5 years in the same period only fell by 10BP, which also opens up space for the interest rate cut in 2024, and it is expected that the interest rate of the first home loan will fall even more in 2024。