Text/Team Liu Bo At around 9 pm on September 29, the central bank released a series of major benefits on its official website. These include: 1. Reduce existing mortgage interest rates before October 31, 2024. Commercial banks will issue relevant announcements and batch adjustmen

Text/Liu Bo Team

At around 9 pm on September 29, the central bank released a series of major benefits on its official website. These include:

. Before October 31, 2024, the existing mortgage interest rates will be reduced.

Commercial banks will issue relevant announcements and batch adjustment details to uniformly reduce the points added to mortgage interest rates based on LPR, and provide convenience to borrowers as much as possible. The vast majority of borrowers can complete "one-click operation" through online banking, mobile banking and other channels, without going to commercial bank branches.

. Independently negotiate and dynamically adjust existing mortgage interest rates based on market-oriented principles.

Specifically includes: Starting from November 1, 2024, if the contract stipulates a floating interest rate, commercial personal housing loan borrowers can negotiate with banking financial institutions to agree on a repricing cycle. On the interest rate repricing date, the pricing basis is adjusted to the loan market quoted interest rate in the most recent month. The interest rate repricing cycle and adjustment method should be specified in the loan contract.

Fixed-rate commercial personal housing loan borrowers can negotiate with banking financial institutions, and the banking financial institutions will issue new floating-rate commercial personal housing loans to replace existing loans. During the replacement, the interest rate is formed based on the loan market quote interest rate in the most recent month and points are added as the pricing basis. The point addition range is equal to the difference between the original contract interest rate and the loan market quote interest rate in the most recent month.

Starting from November 1, 2024, when the interest rate of floating-rate commercial personal housing loans deviates to a certain extent from the commercial personal housing loans newly issued nationwide, the borrower can negotiate with the banking financial institution and the banking financial institution will issue a new one. Floating rate commercial personal housing loans replace existing loans. The re-agreed point increase should reflect changes in market supply and demand, borrower risk premium and other factors, and the point increase range should not be lower than the lower limit (if any) of the interest rate increase on commercial personal housing loans in the city where the loan was replaced.

Remove the restriction on the minimum one-year mortgage interest rate repricing cycle. Starting from November 1, 2024, floating rate mortgages with newly signed contracts will be consistent with other floating rate loans except mortgages, and the repricing cycle can be determined by the borrower and the borrower through independent negotiation. Eligible borrowers with existing mortgage loans can negotiate with commercial banks to adjust the point increase in mortgage interest rates, and at the same time adjust the repricing cycle so that existing mortgage interest rates reflect changes in the pricing basis (lpr) in a timely manner and smooth the transmission of monetary policy.

translated into vernacular is: Those who chose fixed interest rates before can now adjust to floating interest rates and reduce interest rates; the repricing cycle of existing mortgage loans in the future can be more flexible, and you can enjoy the dividends brought by LPR interest rate cuts at any time. In the future, the "added points" part will no longer be fixed, but can be flexibly adjusted.

This is a major benefit for home buyers. In the future, you will no longer be trapped by high interest rates!

Major banks stated overnight that they are working hard to formulate implementation plans for batch adjustments to existing mortgage interest rates. For example, China Construction Bank:

. For families who purchase houses with loans, commercial personal housing loans no longer distinguish between first and second houses, and the minimum down payment ratio is unified to no less than 15%.

On the basis of the unified minimum down payment ratio across the country, all provincial branches of the People's Bank of China and all dispatched offices of the State Financial Supervision and Administration Bureau shall independently determine whether each city under its jurisdiction has set a minimum down payment ratio in accordance with the principle of city-specific policy implementation and according to the regulatory requirements of the governments of each city under its jurisdiction. Differentiated minimum down payment ratio policies, and determine the lower limit of the minimum down payment ratio in each city under the jurisdiction.

. Two major financial favorable policies have been extended to the end of 2026.

"Notice of the People's Bank of China and the China Banking and Insurance Regulatory Commission on the Current Financial Support for the Stable and Healthy Development of the Real Estate Market" (Yinfa [2022] No. 254) The applicable period for reasonable extension policies for existing financing such as development loans and trust loans Extended to December 31, 2026.

If the relevant policies in the "Notice of the General Office of the People's Bank of China and the General Office of the State Financial Supervision and Administration on the Management of Commercial Property Loans" (Yinbanfa [2024] No. 8) have an applicable period, the applicable period will be extended to 2026 December 31st.

. For refinancing of affordable housing, the proportion of reloans issued by the People's Bank of China to financial institutions has been increased from 60% of the loan principal to 100%.

Also tonight, Shanghai fired the first shot of first-tier cities to further loosen the property market!

The Shanghai Municipal Housing and Urban-Rural Development Management Committee issued the "Notice on Further Optimizing Policies and Measures for the City's Real Estate Market" on the official website. The full text is as follows:

Adjustment of housing purchase restriction policy

(1) For non-Shanghai cities Purchased by registered resident families and single persons For those who live outside the outer ring, the number of years required to pay social insurance or personal income tax when buying a house is adjusted to the period of continuous payment for one year or more before the date of purchase.

(2) Non-local residents who hold a "Shanghai Residence Permit" and whose points have reached the standard value and have paid social insurance or personal income tax in this city for 3 years or more will enjoy the benefits of Shanghai residents in purchasing housing units. Home buying benefits for families.

(3) Implement a more differentiated house purchase policy in the Lingang New Area of ​​the Free Trade Zone. For groups who work in the new area and have job-housing separation, on the basis of implementing the existing housing purchase restriction policy, they can purchase more in the new area. 1 set of housing to promote work-housing balance.

Optimize housing credit policies

(1) Implement the national policy on reducing existing mortgage interest rates, guide commercial banks to steadily and orderly reduce existing mortgage interest rates to near the new loan interest rates, and further reduce the mortgage interest expenses of home buyers.

(2) The minimum down payment ratio for commercial personal housing loans for first homes is adjusted to no less than 15%. The minimum down payment ratio for commercial personal housing loans for second homes is adjusted to no less than 25%; the minimum down payment ratio for second home loans in areas with differentiated policies is adjusted to no less than 20%. The minimum down payment ratio for housing provident fund second home loans will be adjusted accordingly.

Adjust the housing tax policy

(1) Adjust the value-added tax tax collection and exemption period, and adjust the value-added tax collection and exemption period for personal external sales of housing from 5 years to 2 years.

(2) In accordance with national work arrangements, timely cancel ordinary housing standards and non-ordinary housing standards, reduce housing transaction costs, and better meet residents' needs for improved housing.

This notice will be effective from October 1, 2024.

Comment: Shanghai has not canceled the purchase restrictions outside the outer ring road, and still retains the requirement of 1-year social security (or personal income tax). This means that the previously rumored possibility of Beijing lifting purchase restrictions outside the Fifth Ring Road has been greatly reduced.

It remains to be seen whether Shenzhen will cancel the purchase restrictions in non-core areas; as for the purchase restrictions in the core areas of Beijing, Shanghai and Shenzhen, it may be difficult to completely cancel them. Guangzhou, Tianjin, and Hainan are relatively more likely to completely lift purchase restrictions.

Text/Liu Bo Team

At around 9 pm on September 29, the central bank released a series of major benefits on its official website. These include:

. Before October 31, 2024, the existing mortgage interest rates will be reduced.

Commercial banks will issue relevant announcements and batch adjustment details to uniformly reduce the points added to mortgage interest rates based on LPR, and provide convenience to borrowers as much as possible. The vast majority of borrowers can complete "one-click operation" through online banking, mobile banking and other channels, without going to commercial bank branches.

. Independently negotiate and dynamically adjust existing mortgage interest rates based on market-oriented principles.

Specifically includes: Starting from November 1, 2024, if the contract stipulates a floating interest rate, commercial personal housing loan borrowers can negotiate with banking financial institutions to agree on a repricing cycle. On the interest rate repricing date, the pricing basis is adjusted to the loan market quoted interest rate in the most recent month. The interest rate repricing cycle and adjustment method should be specified in the loan contract.

Fixed-rate commercial personal housing loan borrowers can negotiate with banking financial institutions, and the banking financial institutions will issue new floating-rate commercial personal housing loans to replace existing loans. During the replacement, the interest rate is formed based on the loan market quote interest rate in the most recent month and points are added as the pricing basis. The point addition range is equal to the difference between the original contract interest rate and the loan market quote interest rate in the most recent month.

Starting from November 1, 2024, when the interest rate of floating-rate commercial personal housing loans deviates to a certain extent from the commercial personal housing loans newly issued nationwide, the borrower can negotiate with the banking financial institution and the banking financial institution will issue a new one. Floating rate commercial personal housing loans replace existing loans. The re-agreed point increase should reflect changes in market supply and demand, borrower risk premium and other factors, and the point increase range should not be lower than the lower limit (if any) of the interest rate increase on commercial personal housing loans in the city where the loan was replaced.

Remove the restriction on the minimum one-year mortgage interest rate repricing cycle. Starting from November 1, 2024, floating rate mortgages with newly signed contracts will be consistent with other floating rate loans except mortgages, and the repricing cycle can be determined by the borrower and the borrower through independent negotiation. Eligible borrowers with existing mortgage loans can negotiate with commercial banks to adjust the point increase in mortgage interest rates, and at the same time adjust the repricing cycle so that existing mortgage interest rates reflect changes in the pricing basis (lpr) in a timely manner and smooth the transmission of monetary policy.

translated into vernacular is: Those who chose fixed interest rates before can now adjust to floating interest rates and reduce interest rates; the repricing cycle of existing mortgage loans in the future can be more flexible, and you can enjoy the dividends brought by LPR interest rate cuts at any time. In the future, the "added points" part will no longer be fixed, but can be flexibly adjusted.

This is a major benefit for home buyers. In the future, you will no longer be trapped by high interest rates!

Major banks stated overnight that they are working hard to formulate implementation plans for batch adjustments to existing mortgage interest rates. For example, China Construction Bank:

. For families who purchase houses with loans, commercial personal housing loans no longer distinguish between first and second houses, and the minimum down payment ratio is unified to no less than 15%.

On the basis of the unified minimum down payment ratio across the country, all provincial branches of the People's Bank of China and all dispatched offices of the State Financial Supervision and Administration Bureau shall independently determine whether each city under its jurisdiction has set a minimum down payment ratio in accordance with the principle of city-specific policy implementation and according to the regulatory requirements of the governments of each city under its jurisdiction. Differentiated minimum down payment ratio policies, and determine the lower limit of the minimum down payment ratio in each city under the jurisdiction.

. Two major financial favorable policies have been extended to the end of 2026.

"Notice of the People's Bank of China and the China Banking and Insurance Regulatory Commission on the Current Financial Support for the Stable and Healthy Development of the Real Estate Market" (Yinfa [2022] No. 254) The applicable period for reasonable extension policies for existing financing such as development loans and trust loans Extended to December 31, 2026.

If the relevant policies in the "Notice of the General Office of the People's Bank of China and the General Office of the State Financial Supervision and Administration on the Management of Commercial Property Loans" (Yinbanfa [2024] No. 8) have an applicable period, the applicable period will be extended to 2026 December 31st.

. For refinancing of affordable housing, the proportion of reloans issued by the People's Bank of China to financial institutions has been increased from 60% of the loan principal to 100%.

Also tonight, Shanghai fired the first shot of first-tier cities to further loosen the property market!

The Shanghai Municipal Housing and Urban-Rural Development Management Committee issued the "Notice on Further Optimizing Policies and Measures for the City's Real Estate Market" on the official website. The full text is as follows:

Adjustment of housing purchase restriction policy

(1) For non-Shanghai cities Purchased by registered resident families and single persons For those who live outside the outer ring, the number of years required to pay social insurance or personal income tax when buying a house is adjusted to the period of continuous payment for one year or more before the date of purchase.

(2) Non-local residents who hold a "Shanghai Residence Permit" and whose points have reached the standard value and have paid social insurance or personal income tax in this city for 3 years or more will enjoy the benefits of Shanghai residents in purchasing housing units. Home buying benefits for families.

(3) Implement a more differentiated house purchase policy in the Lingang New Area of ​​the Free Trade Zone. For groups who work in the new area and have job-housing separation, on the basis of implementing the existing housing purchase restriction policy, they can purchase more in the new area. 1 set of housing to promote work-housing balance.

Optimize housing credit policies

(1) Implement the national policy on reducing existing mortgage interest rates, guide commercial banks to steadily and orderly reduce existing mortgage interest rates to near the new loan interest rates, and further reduce the mortgage interest expenses of home buyers.

(2) The minimum down payment ratio for commercial personal housing loans for first homes is adjusted to no less than 15%. The minimum down payment ratio for commercial personal housing loans for second homes is adjusted to no less than 25%; the minimum down payment ratio for second home loans in areas with differentiated policies is adjusted to no less than 20%. The minimum down payment ratio for housing provident fund second home loans will be adjusted accordingly.

Adjust the housing tax policy

(1) Adjust the value-added tax tax collection and exemption period, and adjust the value-added tax collection and exemption period for personal external sales of housing from 5 years to 2 years.

(2) In accordance with national work arrangements, timely cancel ordinary housing standards and non-ordinary housing standards, reduce housing transaction costs, and better meet residents' needs for improved housing.

This notice will be effective from October 1, 2024.

Comment: Shanghai has not canceled the purchase restrictions outside the outer ring road, and still retains the requirement of 1-year social security (or personal income tax). This means that the previously rumored possibility of Beijing lifting purchase restrictions outside the Fifth Ring Road has been greatly reduced.

It remains to be seen whether Shenzhen will cancel the purchase restrictions in non-core areas; as for the purchase restrictions in the core areas of Beijing, Shanghai and Shenzhen, it may be difficult to completely cancel them. Guangzhou, Tianjin, and Hainan are relatively more likely to completely lift purchase restrictions.