On May 17, the People's Bank of China issued three notices in succession:
Notice of the People's Bank of China on lowering the interest rate of personal housing provident fund loans
People's Bank of China Shanghai Headquarters, branches of all provinces, autonomous regions, municipalities directly under the Central Government and cities with separate planning status; Policy banks, state-owned commercial banks, Postal Savings Bank of China, joint-stock commercial banks: 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% respectively and 3.325%.
Notice of the People's Bank of China on adjusting the interest rate policy of commercial personal housing loans
People's Bank of China Shanghai Headquarters, branches of all provinces, autonomous regions, municipalities directly under the Central Government and cities with separate planning status; State-owned commercial banks, the Postal Savings Bank of China, and all joint-stock commercial banks: In order to implement the decisions and arrangements of the CPC Central Committee and the State Council, adapt to the new changes in the supply and demand relationship of the mainland real estate market, and the new expectations of the people for high-quality housing, and promote the steady and healthy development of the real estate market, the following notice is hereby given on matters related to the adjustment of the interest rate policy for commercial personal housing loans:
1. Abolish the lower limit of the interest rate policy for commercial personal housing loans for the first and second houses at the national level.
2. Each provincial-level branch of the People's Bank of China, in accordance with the principle of city-specific policy, guides the self-discipline mechanism of market interest rate pricing at the provincial level, and independently determines whether to set the lower and lower limits of the interest rate of commercial personal housing loans in each city within their jurisdiction (if any) in accordance with the real estate market situation of each city within their jurisdiction and the regulation and control requirements of the local government.
3. Banking financial institutions shall, in accordance with the lower limit of interest rates (if any) determined by the self-discipline mechanism of market interest rate pricing at the provincial level, reasonably determine the specific interest rate level of each loan in combination with the operating conditions of the institution, customer risk status and other factors.
In the event of any inconsistency between the previous relevant provisions and this Notice, this Notice shall prevail.
Notice of the People's Bank of China and the State Administration of Financial Supervision on adjusting the minimum down payment ratio of individual housing loans
People's Bank of China Shanghai Headquarters, branches of all provinces, autonomous regions, municipalities directly under the Central Government and cities with separate planning status; the supervision bureaus of the State Administration of Financial Supervision and Administration; Commercial banks in various countries, Postal Savings Bank of China, joint-stock commercial banks:
In order to implement the decisions and arrangements of the CPC Central Committee and the State Council, to adapt to the new changes in the supply and demand relationship of the mainland real estate market, the new expectations of the people for high-quality housing, and to promote the steady and healthy development of the real estate market, the relevant matters of the personal housing loan policy are hereby notified as follows:
For households that take out loans to purchase commercial housing, the minimum down payment ratio for 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.
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