In the context of the reduction of the interest rate of the existing housing loan, the call for investment and financial management is better than repayment of the mortgage

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Blue Whale News, September 10 (Reporter Cui Lupeng) At a time when market rumors are considering further lowering the interest rate of the stock mortgage, the possibility of the reduction of the interest rate of the stock mortgage has sparked widespread discussion.

In response to the above-mentioned rumors of the reduction of existing housing loans, Blue Whale News called the Beijing personal loan centers of many banks, and was told that they did not know about it at present.

Ding Zuyu, chairman of CRIC Group and executive director of Shanghai E-House Real Estate Research Institute, said, "With the gradual expansion of the spread between new and old mortgages, there is still room for further reduction in the interest rate of existing mortgages. In fact, since the '517' New Deal, with the decline of incremental mortgage interest rates, the call for a reduction in the interest rate of existing mortgages has risen again. ”

Ding Zuyu believes that if the interest rate on the stock of housing loans can be lowered as soon as possible, it can effectively reduce the debt pressure of residents and release their purchasing power, thereby boosting residents' ability to pay and consumer confidence, stimulating the rebound of consumption, and providing impetus for economic growth.

Buyers are concerned about whether there will be adjustments to the mortgage markup

Blue Whale News interviewed a number of home buyers in Beijing, Shanghai and Shenzhen and found that for the reduction of the interest rate of the existing housing loan, they are most concerned about whether the mortgage markup will be adjusted.

It is understood that the current stock of housing loans in the three places is between 30 BP and 55 BP. Duan Wu, a home buyer in Beijing, said, "If the increase is not canceled, even if my existing mortgage is lowered with the LPR, the reduction will be very limited." ”

According to Li Yujia, chief researcher of the Housing Policy Research Center of the Guangdong Provincial Urban Planning Institute, from October 2019 to May 2022, the interest rate of the first home loan in several key cities of Beijing, Shanghai, Shenzhen and Xiamen was generally between 4.8% and 5.2%, which is about 150BP higher than the current incremental first home loan.

According to the disclosure of the People's Bank of China, the weighted average interest rate of existing housing loans at the end of September 2023 was 4.29%; Considering the repricing effect of existing housing loans, if most of the existing housing loans are repriced on January 1, 2024, the weighted average interest rate of existing housing loans will be about 4.19% after the repricing is completed in early 2024.

Since the beginning of this year, the loan prime rate (LPR) has undergone two adjustments, with the LPR with a maturity of more than 5 years unilaterally reduced by 25BP (basis points) to 3.95% in February, and another 10BP to 3.85% in July, with a cumulative reduction of 35BP.

According to Blue Whale News, at present, the interest rate on the first housing loan issued in many cities has dropped to about 3.2%, and the current stock of housing loans in Beijing, Shanghai and Shenzhen is between 30 BP and 55 BP. Taking Beijing as an example, the current interest rate of existing housing loans is mostly 4.3%-4.75%, and the interest rate of the first set of new commercial housing is mostly 3.4%-3.5%, and the interest rate difference has exceeded 100 BP before. In addition, the interest rate of the first home loan in some cities has dropped to less than 3%, for example, in Guangzhou, the interest rate of the first home loan of some commercial banks can be as low as 2.89%, which is almost the same as the interest rate of 2.85% of the provident fund.

The huge interest rate differentials in the current market are causing more people to prepay their loans. According to recent statistics from CICC, the prepayment rate of bank mortgages is still at a high level of around 14%, and there may be room to replace mortgages with consumer loans and business loans.

"It's better to pay off the mortgage than to invest in financial management and buy gold." This is Chen Ming's most obvious feeling in the past two years. Chen Ming bought a house in the suburbs of Beijing in 2022, with a commercial loan of 900,000 yuan, and the interest rate was 55 bps above the benchmark interest rate of 4.9% at that time, which was 5.45%, and the loan was for 20 years, with a monthly payment of 6,165.6 yuan with equal principal and interest. After several rounds of LPR adjustments and last year's reduction in the interest rate of the existing mortgage, his mortgage interest rate has dropped to 4.75% so far. "In the first half of the year, the average yield of our bank's wealth management products was only 2.8%, and the interest rate spread was close to 2%." Based on this, recently, Chen Mingdong scraped together to pay off the balance of nearly 600,000 yuan of the mortgage at one time.

In Shanghai, Zhang Na, who just bought a new house last year, is prepaying her loan in the style of "ant moving". In March last year, she and her husband jointly purchased a wedding house worth more than 600 yuan, with a down payment of more than 2 million, in addition to a commercial loan and a provident fund loan of 4 million, with a loan term of 30 years, a commercial loan interest rate of 4.55%, and a monthly payment of 21,000 yuan. "That's too high compared to the current interest rate of 3.5 percent." Zhang Na said that before refinancing, they had negotiated with the bank to repay the loan in advance, "Now as long as they can make an appointment, they will repay the balance in advance." ”

In many places, "business to business" has been restarted, and it has rarely been carried out in core cities

Although it is unknown whether the interest rate of the existing housing loan will be reduced, recently, the housing provident fund centers in Qingdao, Shandong, Ganzhou, Jiangxi, Changchun, Jilin, Xuancheng, Anhui and other cities have issued a "business to public" policy, borrowers can convert part (or all) of commercial loans into provident fund loans according to relevant regulations, thereby reducing the pressure on buyers to repay loans.

Taking Qingdao, Shandong Province as an example, assuming that the interest rate of the commercial loan is 3.95% and the first set of interest rate of the provident fund loan is 2.85%, and the equal principal and interest loan of 600,000 yuan and the term of 30 years are selected, the monthly payment of the provident fund loan is 365.88 yuan less than that of the commercial loan, which can save 4,390 yuan in one year and 131,700 yuan in 30 years.

According to incomplete statistics from Blue Whale News, up to now, more than 30 cities across the country have successively implemented or optimized the "business to business" policy.

However, most of the first- and second-tier cities have not yet started this business. The reason for this may be related to the gap in the capital pool.

The Hangzhou Housing Provident Fund Management Center replied to the above questions on the consultation platform that the utilization rate of provident fund funds continues to be at a high level, and it still needs to solve the liquidity problem through financing, and does not have the ability and conditions to carry out such business for the time being; Nanjing Housing Provident Fund Management Center also previously said that the utilization rate of housing provident fund funds is still running at a high level (more than 100%), so it does not have the conditions to explore and carry out "business to business" business to ensure that the normal provident fund loan business will not be affected.

There is also a view that the interest rate of the existing mortgage can be reduced through "re-mortgage". The so-called remortgage of existing housing loans refers to the further liberalization of the competition of banking institutions for existing housing loans on the basis of abolishing the lower limit of housing loan interest rates, so as to achieve the reduction of stock housing loan interest rates.

Chen Wenjing, director of market research at the China Index Research Institute, believes that the current implementation of the stock mortgage interest rate is different, and in the current market environment, the borrower and the original commercial bank may replace the internal replacement or the original commercial bank directly reduce the stock mortgage interest rate may be more appropriate, and through the way of mortgage transfer between different banks, or cause greater market competition, the expected stability will be disturbed.

Chen Ming, Zhang Na, and Duan Wu are pseudonyms in the article.