The latest LPR (quoted interest rate in the loan market) has been implemented. According to China first finance and economics, since the 23rd, major banks across the country have begun to follow the LPR linked mortgage interest rate of 4.45% for more than five years, superimposing the 20 basis points that the central bank lowered the lower limit of the interest rate for new first home loans in the early stage. Some banks in cities such as Tianjin, Suzhou and Qingdao have handled new first home loans at the lowest interest rate of 4.25%, which is the lowest at present.
China Merchants Securities Co.Ltd(600999) banking chief analyst Liao Zhiming believes that with the obvious relaxation of real estate policy, most areas outside the first tier cities will gradually implement the national lower interest rate.
In addition, it is worth noting that with the decline in the asset side yield of residents such as deposits, financial management and monetary funds, the stock buyers who previously bought houses with higher mortgage interest rates began to tend to repay the mortgage in advance, and the heat of this topic has been rising recently. It is only applicable to the bank personnel who have idle loan expenses in the future, but it can only reduce the pressure of prepayment in the bank.
Founder Securities Co.Ltd(601901) analyst Zhang Wei believes that the “prepayment of housing loans” is expected to continue in the short term due to the high savings rate of residents and the reduction of Consumption Willingness due to the epidemic, as well as the low return on low-risk assets in the short term. However, with the further decline of mortgage interest rate, new mortgage loans will gradually increase, and residents will not continue to deleverage.
The reporter noted that recently, more cities are trying to further loosen the “four restrictions” policy, and the purchase and sale restrictions in some regions are gradually reduced or cancelled. It is generally predicted in the industry that the real estate sales with both volume and price falling for eight consecutive months are expected to gradually pick up.
multi place “top grid” landing latest mortgage interest rate
On Monday 22nd, banks across the country began to implement a new phase of LPR On the previous 20th (last Friday), the central bank announced the latest LPR: the LPR over five years was 4.45%, down 15 basis points from 4.6% last month, and the LPR for one year was 3.7%, the same as last month.
This is the first time since the reform of LPR quotation formation mechanism in 2019 that LPR has not decreased in one-year period and decreased in five-year period, and the latter has recorded the largest decline. Previously, the LPR over 5 years was reduced from 4.85% to 4.6% after four times, with a decrease of no more than 10 basis points each time.
At present, the interest rate benchmark of most housing mortgage loans is linked to LPR with a term of more than 5 years, that is, banks adopt the “LPR plus point” method. Combined with the favorable policies of the central bank and the China Banking and Insurance Regulatory Commission on the 15th, such as reducing the lower limit of the new first home loan interest rate by 20 basis points, institutions generally analyzed that the current targeted interest rate cut for the real estate market is increasing, which is intended to curb the downward trend of real estate.
On the 22nd, the reporter telephoned many bank outlets to inquire about the latest mortgage interest rate. The relevant staff confirmed that it had been implemented in accordance with the latest LPR, but the specific increase point should be finally determined according to the cooperation with the real estate and the personal credit of the buyer.
“The first house is the first loan, and the purchase area is less than 140 square meters, which can be handled according to the latest LPR, that is, 4.45% Industrial And Commercial Bank Of China Limited(601398) Chongqing Branch staff told reporters that at present, the bank can achieve the lowest benchmark interest rate level.
Earlier, the reporter learned that after the central bank and the China Banking and Insurance Regulatory Commission issued a document, many banks have reduced the lower limit of interest rate by 20 basis points on the basis of the benchmark interest rate, and the interest rate of the first house of some banks in Suzhou, Qingdao, Jinan, Zhengzhou, Tianjin and other places can be as low as 4.4%. After the LPR reduction, the interest rate level of the first house in various regions will be further reduced. New home buyers can apply for house purchase loans according to the latest lower limit of 4.25%, including large banks, joint-stock banks and urban commercial banks.
“If the credit is good, you can reduce the benchmark interest rate by 20 basis points. It must be the first house.” China Construction Bank Corporation(601939) Qingdao Branch staff said Bank Of Qingdao Co.Ltd(002948) also a personal loan manager said that from the 21st, the interest rate of the bank’s new first housing loan was further reduced to 4.25%. Another intermediary told reporters that it had received a notice from several urban commercial banks that the first mortgage interest rate would be 4.25% from now on China Construction Bank Corporation(601939) Suzhou Branch personal loan manager also confirmed to reporters that the latest interest rate level of the first house is 4.25%.
Except that the loan interest rate of the second house in Suzhou is basically the same as that of the first house, the interest rate of second-hand houses in most cities that implement the interest rate of the first house of 4.25% still maintains the minimum interest rate lower limit of “LPR + 60 basis points” China Construction Bank Corporation(601939) a staff member of a branch in Tianjin said: “the second suite has not changed, it is still LPR + 60 basis points, and now it is 5.05%.” Bank Of Qingdao Co.Ltd(002948) second home interest rate also fell from 5.2% to 5.05%.
However, in contrast, the mortgage interest rate in first tier cities is generally not close to the lower limit. Among them, most banks in Beijing still maintain the interest rate level of 5% (LPR + 55bps) for the first house and 5.5% (LPR + 105bps) for the second house, and the lowest interest rate for the first house of Guangzhou Dahang can be 5.05% (LPR + 60bps). “Beijing, Shanghai, Guangzhou and Shenzhen have not implemented a 20 basis point reduction (on the basis of LPR). It is unclear whether it will be implemented or not.” Industrial And Commercial Bank Of China Limited(601398) Beijing Branch personal loan officer told reporters.
future housing loan space
Liao Zhiming believes that with the obvious relaxation of real estate policy, most regions outside the first tier cities will gradually implement the national lower interest rate.
The data show that the weighted average interest rate of newly issued personal housing loans in March this year was 5.49%, down 14 basis points from December last year, but still significantly higher than the weighted average interest rate of newly issued corporate loans in the same period (4.36%). According to the statistics of Shell Research Institute, the loan interest rates of the first and second houses in 103 key cities in April were 5.17% and 5.45% respectively, down 17 and 15 basis points respectively from the previous month, which is the lowest monthly since 2019.
However, the monthly credit data and real estate sales data in the same period are still not optimistic. After the first decline in residents’ medium and long-term loans (mainly mortgages) in February, housing loans decreased by 60.5 billion yuan again in April, a year-on-year decrease of 402.2 billion yuan; From January to April, the sales of commercial housing continued to be depressed, among which the residential sales fell by more than 30% year-on-year, and the volume and price fell for eight consecutive months.
Liao Zhiming predicted that as more and more urban areas gradually implement the national minimum interest rate, the weighted average interest rate of newly issued personal housing loans is expected to drop to about 4.6%, nearly 90 basis points lower than that in March.
Residents’ willingness to purchase houses has not been substantially improved. On the one hand, it is because the liquidity crisis of real estate enterprises has not been lifted and they lack confidence in the prospect of the real estate market; The other is the repeated interference of this round of epidemic. In this context, in addition to the “city specific policies” on the interest rate level, the measures to deregulate the real estate market continue, including both the third and fourth tier cities with high de inventory pressure and the hot second tier cities with the continuous decline of second-hand housing volume and price.
For example, recently, the Hunan Provincial Department of natural resources and the Provincial Department of housing and urban rural development jointly issued the notice on implementing the regulation objectives of the real estate market and optimizing the approval of real estate land, which puts forward clear requirements for the risk prevention and control of “de inventory of real estate”. If the de inventory cycle of commercial housing in cities, prefectures, counties, cities and districts is 13 ~ 36 months, the approval of new land for real estate development should be strictly controlled; For cities and counties with a non residential commercial housing de urbanization cycle of more than 36 months for two consecutive quarters, the approval and listing transfer of new non residential commercial housing land will be suspended, except for provincial and municipal key investment projects and land for logistics and gas filling stations.
In addition, following the launch of “preferential packages” for multi child families in popular cities such as Hangzhou, Nanjing, Dongguan, Wuxi and Wuhan to stimulate improved demand, recently, many cities have tried to further liberalize the sale and purchase of second-hand houses, and the tendency to activate the second-hand housing market is more obvious. On May 23, Harbin officially announced to abolish the regional sales restriction policy of the real estate market introduced in 2018, fully liberalize the trading of second-hand houses and promote the de inventory of commercial houses.
However, it is worth noting that recently, there have been “one-day tours” of deregulation policies in some cities. Industry insiders believe that with the support of a series of “bottom-up” policies, “housing without speculation” is still the bottom line.
why did buyers set off a “wave of early repayment”
At present, the loan burden of new home buyers will be reduced after the “LPR + lower interest rate limit for more than five years” is lowered. According to the minimum interest rate level of 4.25% for the first house, taking the loan amount of 3 million yuan, the term of 30 years and the repayment of equal principal and interest as an example, the buyer can pay back about 621 yuan per month, and the interest expenditure can be reduced by more than 220000 yuan in 30 years.
However, while the “package” policy encourages new housing demand, some stock buyers are “unable to sit down”. Recently, the topic of “early repayment of housing loans” on the Internet has been heating up. According to comprehensive netizens, it is mostly related to the high loan interest rate at the time of house purchase, the continuous decline of the current bank deposit interest rate, financial management and fund yield, coupled with the increased income uncertainty caused by the epidemic, and the willingness to prepay significantly increased.
From the perspective of loan cost, even existing buyers who choose to link with LPR can enjoy the benefits of this “targeted interest rate reduction” only after the repricing date, that is, January 1 next year or the date corresponding to the loan Issuance Date. This means that if the loan issuance date of home buyers is just after May 20, the mortgage interest rate can be implemented according to the latest LPR quotation of more than 5 years. From the perspective of mortgage interest rates over the years, many people who buy houses before 2019 have mortgage costs of 5% or even more than 6%, which is a large gap compared with the current interest rate.
On the other hand, under the background of the turmoil of the stock market and bond market this year, the yield of public funds and bank financial management after the net worth transformation has generally declined, the interest rate of three-year and five-year certificates of deposit has fallen below 3.5%, the interest rate of time deposit has also further declined in the process of bank cost reduction, and the yield of residential assets has been difficult to cover the cost of housing loans.
In fact, banks have always provided support services for prepayment, but a 36 month lock-in period is often agreed in the loan contract, otherwise buyers need to pay a small proportion of default fees. A bank account manager told reporters that prepayment can indeed reduce the burden in the future, but it is only applicable to users who hold idle funds and have no better income channels. It is suggested that buyers should not “follow the flow”.
Taking the total loan of 1 million yuan, equal principal and interest and repayment period of 30 years as an example, when the repayment has been made for 2 years, buyers can choose two modes: “shorten the repayment period and keep the monthly payment unchanged” and “reduce the monthly payment and keep the repayment period unchanged”. After 500000 yuan of idle funds are used to repay the principal, the former method can save more than Shanghai Pudong Development Bank Co.Ltd(600000) yuan of total interest and the latter method can save more than 300000 yuan.
Zhang Wei believes that due to the high savings rate of residents and the reduction of Consumption Willingness due to the epidemic, and the low return on low-risk assets in the short term, the “prepayment of housing loans” is expected to continue in the short term. However, in the future, the mortgage interest rate will further decline, the new mortgage loans will gradually increase, and residents will not continue to deleverage.
