Several major commercial banks in China are introducing a new pricing system for existing mortgage rates starting Friday.
Prior to the change, mortgage rate adjustments could only occur once a year, but now homebuyers will have access to greater flexibility. They will have the opportunity to ask their bank to adjust the repricing period to either three or six months, or continue with the one-year option.
<img src='https://news.cgtn.com/news/2024-11-01/China-s-commercial-banks-introduces-new-mortgage-pricing-system–1yaNFrZF3Co/img/a87b95d18aa344cf859707b25cb981c2/a87b95d18aa344cf859707b25cb981c2.png' alt='A view of the headquarters of China's central bank, People's Bank of China, Beijing, China, September 10, 2024. /CFP'
This comes amid a raft of proactive policy changed aimed at supporting the real estate market.
On October 25, a number of China’s major commercial banks started to reduce interest rates on existing housing mortgages, following the central bank’s cut to mortgage rates. Six major commercial banks have already reduced existing mortgage rates to no less than 30 basis points below the loan time rate (LPR), with more multiple joint-stock commercial banks expected to follow suit.
<img src='https://news.cgtn.com/news/2024-11-01/China-s-commercial-banks-introduces-new-mortgage-pricing-system–1yaNFrZF3Co/img/4297728bbbf5424f9cc9040defe6dc75/4297728bbbf5424f9cc9040defe6dc75.jpeg' alt='The south-facing facade of newly build residential property. /CFP file photo'
The country’s proactive policies appears to be beginning to bear fruit.
China’s residential real estate sales have seen significant growth in October, according to the data released by the Ministry of Housing and Urban-Rural Development. The volume of transactions for newly built and second-hand properties increased by 3.9 percent year on year, while also marking the first increase since February this year.
