The detailed rules for the batch adjustment of existing housing loan interest rates, which were "previewed" before the National Day, have officially been released.

On the morning of October 12, Bank of China, Agricultural Bank of China, Industrial and Commercial Bank of China, China Construction Bank, Bank of Communications, and Postal Savings Bank of China successively issued announcements stating that they plan to batch adjust the interest rates of eligible existing commercial individual housing loans on October 25, 2024. Except for the situation where the loan is for the second house in areas such as Beijing, Shanghai, Shenzhen, etc., the interest rates of other eligible housing loans will be adjusted to the Loan Prime Rate (LPR) minus 30 basis points (BP). In addition, banks such as China Merchants Bank, Shanghai Pudong Development Bank, Zhejiang Commercial Bank, and Industrial Bank have also released frequently asked questions about the adjustment of existing housing loan interest rates in recent days.

Which type of existing housing loan interest rates can be adjusted? Is it necessary for individuals to apply actively? Can homebuyers who have chosen a fixed interest rate participate in this adjustment? When can the adjustment be completed? In response to these high-frequency questions that existing housing loan users are concerned about, reporters from the 21st Century Economic Report have organized relevant information in conjunction with the adjustment plans and frequently asked questions released by commercial banks.

1. Which housing loan interest rates can be adjusted?

According to the announcements issued by various banks, the scope of this adjustment includes existing housing loans for the first and second and above sets that have been issued. Individual commercial housing loans (including commercial and residential mixed-use housing) and individual housing loans for housing provident funds are not included in the adjustment.

In terms of adjustment rules, in areas where the floor for newly issued housing loan interest rates has been canceled, for existing housing loans (including the first and second and above sets) with an added margin higher than -30BP based on the Loan Prime Rate (LPR), the added margin will be adjusted to LPR minus 30BP. For those with an added margin not higher than -30BP based on LPR, no adjustment will be made.

2. How to adjust in Beijing, Shanghai, Shenzhen?

At present, there are still situations in first-tier cities where the lower limit of housing loan interest rates has not been canceled. Many banks have clarified that the first set of housing loans and all existing housing loans in Beijing, Shanghai, Shenzhen, and other areas with interest rates higher than LPR minus 30BP will be uniformly adjusted to LPR minus 30BP; the interest rates for the second set of housing loans that are higher than the corresponding policy floor will be uniformly adjusted to the corresponding local policy floor.

According to the frequently asked questions about the adjustment of existing housing loan interest rates released by various banks, following the current policy floor for the second set of housing loans, the adjusted interest rate values are: Beijing outside the Fifth Ring Road LPR minus 25BP, Beijing inside the Fifth Ring Road LPR minus 5BP; Shanghai Free Trade Zone Lingang New Area and Jiading, Qingpu, Songjiang, Fengxian, Baoshan, Jinshan District LPR minus 25BP, other areas LPR minus 5BP; Shenzhen jurisdiction-wide LPR minus 5BP.

3. Is it necessary for individuals to apply actively?

The banks have stated that the adjustment will be carried out automatically for eligible loans and does not require individual application. However, customers are advised to check with their respective banks for specific details regarding the adjustment process and any actions they may need to take.According to announcements released by various banks, without the need for borrowers to apply, banks will uniformly conduct a batch adjustment of the existing mortgage loan interest rates that meet the regulations on October 25, 2024, fully meeting customers' needs for the convenience of interest rate adjustments.

4. How can fixed-rate mortgages participate in the adjustment?

For mortgage customers with fixed interest rates or those priced based on the loan benchmark interest rate, they must first apply to convert to floating rate loans priced based on the Loan Prime Rate (LPR). Those who meet the interest rate adjustment policy of this round can then adjust the interest rate according to the aforementioned rules; those who do not apply for conversion will not be able to proceed.

Mortgage customers who need to convert their interest rate pricing can submit their applications in advance through mobile banking or the loan handling branch. It is worth noting that the application deadlines announced by various banks currently differ. For example, CCB customers must actively apply for the conversion from fixed rate to floating rate by October 23 (inclusive); ABC announced that conversion applications can be made through the bank's mobile banking or loan handling branch before October 22 (exclusive). It is recommended that borrowers consult their banks for specific times. However, major banks have all stated that borrowers can still submit applications after the deadline.

5. How much money can be saved after the adjustment?

ICBC, in a previous Q&A on existing mortgages, gave an example of a homeowner in a second-tier city with a current mortgage interest rate of LPR without加点, that is, 3.85%. After the adjustment, the mortgage interest rate will be LPR-30BP. Assuming that the LPR for terms over 5 years remains unchanged at 3.85%, the re-priced interest rate will be 3.55% (=3.85%-0.3%), which is a decrease of 30BP, or 0.3%, compared to before the adjustment. Taking a mortgage of 1 million yuan for 30 years with equal principal and interest payments as an example, the monthly repayment before the adjustment was about 4688 yuan, and after the adjustment, it will be about 4518 yuan. Xiao Zhang can save about 170 yuan per month, saving a total interest of about 61,000 yuan.

For a homeowner in a first-tier city with a current mortgage interest rate of LPR+55BP (the policy for the first mortgage loan interest rate at the time of loan issuance), that is, 4.4%, after the adjustment, the mortgage interest rate will be LPR-30BP. Assuming that the LPR for terms over 5 years remains unchanged at 3.85%, the re-priced interest rate will be 3.55% (=3.85%-0.3%), which is a decrease of 85BP, or 0.85%, compared to before the adjustment. Taking a mortgage of 1 million yuan for 25 years with equal principal and interest payments as an example, the monthly repayment before the adjustment was about 5502 yuan, and after the adjustment, it will be about 5033 yuan. Xiao Li can save about 469 yuan per month, saving a total interest of about 140,600 yuan.

6. When does it take effect?

The reduction of existing mortgage interest rates will take effect on the day of the adjustment, and the new interest rate加点 will be implemented from the effective date.

7. How to inquire about the adjustment results?Starting from October 25th, the adjustment results can be inquired through various methods such as mobile banking, loan handling banks, business outlets, and official customer service hotlines. If customers have objections to the interest rate adjustment, they can contact the loan service bank after the interest rate adjustment.