CCTV News:On August 31,The People’s Bank of China and the General Administration of Financial Supervision jointly issued the Notice on Adjusting and Optimizing the Differentiated Housing Credit Policy and the Notice on Reducing the Interest Rate of the First Home Loan in Stock to adjust and optimize the housing credit policy. Details are as follows:
Notice of the People’s Bank of China and the State Administration of Financial Supervision on Adjusting and Optimizing the Differentiated Housing Credit Policy
China People’s Bank Shanghai Headquarters, branches of all provinces, autonomous regions, municipalities directly under the Central Government and cities under separate state planning; The supervision bureaus of the State Financial Supervision and Administration Bureau; There are commercial banks in various countries, China Postal Savings Bank and joint-stock commercial banks:
In order to implement the decision-making arrangements of the CPC Central Committee and the State Council, adhere to the positioning that houses are used for living, not for speculation, adapt to the new situation that the relationship between supply and demand in China’s real estate market has undergone major changes, better meet the demand for rigid and improved housing, and promote the stable and healthy development of the real estate market, the People’s Bank of China and the State Administration of Financial Supervision decided to adjust and optimize the differentiated housing credit policy. The relevant matters are hereby notified as follows:
1. For households who purchase commercial housing with loans, the minimum down payment ratio for the first set of commercial personal housing loans is not less than 20%, and the minimum down payment ratio for the second set of commercial personal housing loans is not less than 30%.
Second, the lower limit of the interest rate policy for the first set of commercial personal housing loans shall be implemented according to the current regulations, and the lower limit of the interest rate policy for the second set of commercial personal housing loans shall be adjusted to not less than the quoted interest rate of the loan market for the corresponding period plus 20 basis points.
3. The dispatched offices of the People’s Bank of China and the State Financial Supervision and Administration Bureau shall guide the self-discipline mechanism of interest rate pricing in provincial markets in accordance with the principle of city-specific policies, and independently determine the minimum down payment ratio and the lower interest rate limit of the first and second sets of commercial personal housing loans in cities within their jurisdiction according to the real estate market situation of cities within their jurisdiction and the regulatory requirements of local governments.
4. Banking financial institutions shall reasonably determine the specific down payment ratio and interest rate level of each loan according to the minimum down payment ratio and the lower interest rate limit determined by the self-discipline mechanism of interest rate pricing in provincial markets, combined with the operating conditions of the institutions, customer risk conditions and other factors.
People’s Bank of China
State financial supervision and administration bureau
August 31, 2023
Notice of the People’s Bank of China and the State Administration of Financial Supervision on Matters Related to Reducing the Interest Rate of the First Home Loan in Stock
China People’s Bank Shanghai Headquarters, branches of all provinces, autonomous regions, municipalities directly under the Central Government and cities under separate state planning; The supervision bureaus of the State Financial Supervision and Administration Bureau; There are commercial banks in various countries, China Postal Savings Bank and joint-stock commercial banks:
In order to implement the decision-making arrangements of the CPC Central Committee and the State Council, adhere to the positioning that houses are used for living, not for speculation, guide the borrowers and borrowers of commercial personal housing loans to adjust and optimize their assets and liabilities in an orderly manner, and standardize the order of the housing credit market, the relevant matters concerning reducing the interest rate of the first set of commercial personal housing loans are hereby notified as follows:
1. The commercial personal housing loan for the first housing stock refers to the commercial personal housing loan for the first housing stock that has been issued by financial institutions and signed but not issued before August 31, 2023, or the commercial personal housing loan for other housing stocks that the borrower’s actual housing situation meets the first housing standard in the city.
2. From September 25th, 2023, the borrower with the first set of commercial personal housing loans can apply to the lending financial institution, and the financial institution will issue new loans to replace the first set of commercial personal housing loans. The interest rate level of new loans shall be determined by financial institutions and borrowers through independent negotiation. However, the increase in the loan market quotation rate (LPR) shall not be lower than the lower limit of the interest rate policy for the first commercial personal housing loan in the city where the original loans were issued. The newly issued loans can only be used to repay the first set of commercial personal housing loans, and are still included in the management of commercial personal housing loans.
3. From September 25th, 2023, the borrower with the first commercial personal housing loan can also apply to the lending financial institution to negotiate to change the interest rate level agreed in the contract, and the changed interest rate level of the loan contract shall comply with the provisions of Article 2 of this Notice.
Four, financial institutions should strictly implement the relevant regulatory requirements, the borrower to apply for business loans and personal consumption loans and other loans for penetrating and substantive review, and clearly indicate the risks. Intermediaries that assist borrowers to use business loans and personal consumption loans to illegally replace the stock of commercial personal housing loans are not allowed to cooperate, and the insiders who have the above behaviors are severely dealt with.
Five, all financial institutions should pay close attention to formulate specific operating rules, do a good job in organizing the implementation, improve the service level, timely response to the borrower’s application, as far as possible to take convenient measures to reduce the borrower’s operating costs, to ensure that the relevant requirements of this notice are put in place.
Six, the people’s Bank of China and the branches of the General Administration of Financial Supervision shall immediately forward this notice to the financial institutions under the jurisdiction of the mainland, supervise the implementation, and effectively maintain the market order.
This notice shall come into force as of September 25, 2023. If the previous relevant provisions are inconsistent with this notice, this notice shall prevail.
People’s Bank of China
State financial supervision and administration bureau
August 31, 2023
Relevant persons in charge of the People’s Bank of China and the State Financial Supervision and Administration Bureau answered questions on issues related to the adjustment and optimization of housing credit policies.
On August 31st, the People’s Bank of China and the General Administration of Financial Supervision jointly issued the Notice on Adjusting and Optimizing the Differentiated Housing Credit Policy and the Notice on Matters Related to Reducing the Interest Rate of the First Housing Loan in Stock. Relevant responsible comrades answered reporters’ questions on policy adjustment.
Q: What is the background of the adjustment and optimization of differentiated housing credit policy?
A: On July 24th, Politburo meeting of the Chinese Communist Party made it clear that in order to adapt to the new situation that the supply and demand relationship in China’s real estate market has undergone major changes, real estate policies should be adjusted and optimized in a timely manner, and the policy toolbox should be used well because of the city’s policy. On July 31st, the executive meeting of the State Council proposed that policies and measures conducive to the stable and healthy development of the real estate market should be introduced according to different needs and cities, and research and construction of a new development model of the real estate industry should be accelerated.
In order to implement the decision-making arrangements of the CPC Central Committee and the State Council, the People’s Bank of China and the General Administration of Financial Supervision issued a notice to adjust and optimize the current differentiated housing credit policy, support local governments to make good use of the policy toolbox according to the city, and guide the actual down payment ratio and interest rate of individual housing loans to fall, so as to better meet the rigid and improved housing demand.
Q: What is the focus of the adjustment and optimization of differentiated housing credit policy?
A: First, unify the lower limit of the national minimum down payment ratio policy for commercial personal housing loans. No longer distinguish between cities that implement "restricted purchases" and cities that do not implement "restricted purchases", and the lower limit of the minimum down payment ratio of commercial personal housing loans for the first home and the second home is unified to not less than 20% and 30%.
The second is to adjust the lower limit of the second set of housing interest rate policy to not less than the loan market quotation rate (LPR) of the corresponding term plus 20 basis points. The lower limit of the first set of housing interest rate policy is still not less than the corresponding period LPR minus 20 basis points.
All localities can independently determine the minimum down payment ratio and the lower interest rate limit of the first and second houses within their jurisdiction according to the principle of city-specific policies and the local real estate market situation and regulatory needs.
Q: Why should we lower the interest rate of the first home loan?
A: In recent years, the relationship between supply and demand in China’s real estate market has undergone major changes. Both borrowers and banks have demands for orderly adjustment and optimization of assets and liabilities. The decline in the interest rate of existing housing loans can save interest expenses for borrowers and help expand consumption and investment. For banks, it can effectively reduce the phenomenon of early repayment of loans and reduce the impact on bank interest income. At the same time, it can also reduce the space for illegal use of business loans and consumer loans to replace existing housing loans and reduce potential risks. In order to better adapt to the above new situation, the People’s Bank of China and the General Administration of Financial Supervision clearly support and encourage banks to negotiate with borrowers to adjust the interest rate of the first home loan.
Q: Which stocks of the first home loan can apply for a lower interest rate? How to apply?
A: The eligible first housing loan refers to the commercial personal housing loan of the existing housing that has been issued by financial institutions before August 31, 2023, but has been signed but not issued, and the actual housing situation of the borrower meets the first housing standard in the city.
For eligible stock housing loans, from September 25, 2023, borrowers can take the initiative to apply to the lending banks, and banks are also encouraged to provide borrowers with more convenient services by issuing announcements and batch processing. In terms of adjustment methods, it can not only change the interest rate increase range of housing loans agreed in the contract, but also replace the existing loans with new loans issued by banks. The specific interest rate adjustment range is determined by both borrowers and lenders through consultation, but the adjusted interest rate cannot be lower than the lower limit of the first set of housing loan interest rate policy in the city where the original loan was issued. New loans can only be used to repay existing loans and are still included in the management of commercial personal housing loans.
The People’s Bank of China and the General Administration of Financial Supervision will pay close attention to the market dynamics, guide banks and customers to conduct independent consultations in accordance with the principles of marketization and rule of law, reduce the interest rate of existing housing loans in an orderly manner, and maintain a good market competition order.