Source: China Securities Journal
On the afternoon of May 17, according to the website of the People's Bank of China, the People's Bank of China issued a notice saying that it would cancel the lower limit of the interest rate policy for commercial personal housing loans for the first and second houses at the national level.
The provincial-level branches of the People's Bank of China, in accordance with the principle of city-specific policies, guide the self-discipline mechanism of market interest rate pricing at the provincial level, and independently determine whether to set the lower and lower limits (if any) of the interest rates of commercial personal housing loans in each city within their jurisdiction according to the real estate market situation of each city within their jurisdiction and the regulatory requirements of the local government.
Banking financial institutions should be based on the provincial market interest rate pricing self-discipline mechanism to determine the lower limit of interest rates (if any), combined with the institution's operating conditions, customer risk status and other factors, reasonable determination of the specific interest rate level of each loan.
On the same day, the People's Bank of China and the State Administration of Financial Supervision and Administration issued a notice on adjusting the minimum down payment ratio for individual housing loans. The notice clarifies that for resident households who take out loans to purchase commercial housing, the minimum down payment ratio of commercial personal housing loans for the first house is adjusted to not less than 15%, and the minimum down payment ratio for commercial personal housing loans for second houses is adjusted to not less than 25%.
On this basis, the provincial-level branches of the People's Bank of China and the dispatched agencies of the State Financial Supervision and Administration independently determine the lower limit of the minimum down payment ratio for commercial personal housing loans for the first and second houses in each city under their jurisdiction in accordance with the requirements of urban regulation and control and in accordance with the principle of city-specific policies.
On the same day, the People's Bank of China issued a notice on lowering the interest rate of personal housing provident fund loans. The notice clarifies that the People's Bank of China has decided to reduce the interest rate of personal housing provident fund loans by 0.25 percentage points from May 18, 2024, the interest rate of the first set of personal housing provident fund loans below 5 years (including 5 years) and more than 5 years will be adjusted to 2.35% and 2.85% respectively, and the interest rate of the second set of personal housing provident fund loans below 5 years (including 5 years) and more than 5 years will be adjusted to not less than 2.775% and 3.325% respectively.
(All pictures in the article are from the website of the People's Bank of China)