The People's Bank of China issued a notice to reduce the interest rate adjustment of provident fund loans, and personal provident fund loans were reduced by 0.25 percentage points. It will be implemented from May 18, 2024, and the specific adjustments are as follows:
1. The first set of housing provident fund loans
The annual interest rate will be adjusted to 2.35% for less than 5 years (including 5 years), and 2.85% for more than 5 years.
2. Two sets of housing provident fund loans
The annual interest rate for less than 5 years (including 5 years) will be adjusted to 2.775%, and the annual interest rate for more than 5 years will be adjusted to 3.325%.
Source information: interface news
Compared with the previous CPF loan interest rate, this adjustment will have a significant impact on the monthly repayment and the total amount of interest. Let's compare. We take a loan of 1 million; 30 years before the repayment of the loan, to compare.
Based on the previous CPF loan interest rate of 3.1% for the first home for more than 5 years:
Calculated at 3.1%.
The monthly repayment of the equal principal (decreasing monthly repayment) is: 5361.11 yuan, and the total interest is: 466,000 yuan.
The monthly repayment of equal principal and interest (the monthly repayment remains unchanged) is: 4270.16 yuan, and the total interest is: 537,000 yuan.
Based on the latest CPF loan interest rate of 2.85% for the first home over 5 years:
At the latest interest rate of 2.85%
The monthly repayment of the equal principal (decreasing monthly repayment) is: 5152.78 yuan, and the total interest is: 428,000 yuan.
The monthly repayment of equal principal and interest (the monthly repayment remains unchanged) is: 4135.57 yuan, and the total interest is: 488,000 yuan.
According to the latest provident fund loan interest rate loan loan of 1 million, compared to before:
Equal principal repayment method: monthly underpayment: 5152.78-5361.11=-208.33 yuan; Total underpayment of interest: 38,000.
Equal principal and interest repayment method: monthly underpayment: 4135.57-4270.16 = 134.59 yuan; Total underpayment of interest: 488,000-537,000 = 49,000.
Policy enjoyment
Since the latest CPF loan interest rate 2024 will be implemented from May 18, new customers who apply for CPF loans after this date can directly enjoy the interest rate reduction.
However, existing customers who apply for provident fund loans before May 18, 2024 will still be subject to the original interest rate, and will not be implemented until January 1, 2025 at the adjusted new interest rate, and can consult their own lending bank for details.