China’s major commercial banks have begun reducing interest rates on existing housing mortgage loans, offering relief to millions of homeowners and aiming to stimulate the country’s real estate market.
Starting on Friday, six leading commercial banks, including the Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, Bank of Communications, China Construction Bank, and Postal Savings Bank of China, have cut existing mortgage rates. The adjustments bring the rates to no less than 30 basis points (bps) below the loan prime rate (LPR), following a recent cut by the central bank.
The move comes as part of broader efforts by Chinese authorities to bolster the real estate sector and support economic growth. Multiple joint-stock commercial banks are also set to follow suit, expanding the impact across the nation’s financial landscape.
For current homeowners, this change means a significant reduction in their mortgage payments. On average, existing mortgage rates have been cut by about 50 bps, easing financial burdens and potentially increasing disposable income for consumers.
Economists view this development as a positive step toward revitalizing the housing market, which is a critical component of China’s economy. Lower mortgage rates are expected to encourage property purchases, stimulate investment, and reinforce confidence among both buyers and developers.
This policy adjustment reflects the government’s commitment to maintaining economic stability and addressing challenges within the real estate sector. Observers will be watching closely to see how these changes influence market dynamics in the coming months.
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China's banks cut existing mortgage rates to support real estate
cgtn.com
