Financial Services Association, Feb. 21 (Reporter Gao Ping) Provident fund loan policies have been adjusted in many places. The Jinan Housing Provident Fund Center issued a notice today to adjust the minimum down payment ratio to no less than 20% for those who purchase the first ordinary self-occupied housing unit within the administrative area of Jinan City to apply for a housing provident fund loan. Those signed online after February 22 (inclusive) will be implemented in accordance with the new policy. Tianjin, on the other hand, plans to adjust the provident fund loan policy and reduce the down payment ratio for the first home to 20%. A Financial Services Association reporter discovered that after the Spring Festival, many places introduced new policies for provident fund loans, reducing down payment ratios, etc.

Industry insiders told the Finance Association reporter that since last year, many places have optimized and adjusted their policies. Recently, many places have also adjusted related policies to actively support reasonable housing consumption demand and reduce the down payment ratio for provident fund loans, etc., which will further benefit buyers and have a positive effect on boosting the subsequent market. Furthermore, it also shows that there is plenty of room for support for the Provident Fund policy, which will have some enlightening significance for subsequent policy implementation in other regions.

After the Spring Festival, many local provident fund loan policies have now been adjusted

Today, the Jinan Housing Provident Fund Center issued a notice to adjust the down payment ratio for personal housing provident fund loans. Among them, the minimum down payment ratio for those purchasing the first ordinary self-occupied housing unit to apply for a housing provident fund loan within the administrative area of Jinan City was adjusted to not less than 20%; for those purchasing a second ordinary self-occupied housing to apply for a housing provident fund loan, the minimum down payment ratio was adjusted to not less than 30%. The implementation of the policy is based on the time of online housing signing, and those signed online after February 22, 2024 (inclusive) will be implemented in accordance with the new policy.

Coincidentally, Tianjin is also planning to adjust the down payment ratio for provident fund loans. The Tianjin Housing Provident Fund Management Center recently announced the “Notice on Adjusting the Down Payment Ratio for Personal Housing Provident Fund Loans (Consultation Draft)”. In order to better meet the rigid and improved housing needs of workers, it is proposed to reduce the down payment ratio for the city's first housing provident fund loan from 30% to 20%, and the minimum down payment ratio for the second housing provident fund loan from 40% to 30%.

In fact, after the Spring Festival, many places introduced new mortgage policies. On February 19, the Hainan Provincial Housing Provident Fund Administration issued the “Notice on Adjusting the Minimum Down Payment Ratio for the First Housing Loan of the Housing Provident Fund” to reduce the minimum down payment ratio for the first housing fund personal housing loan from 25% to 20%. On February 18, Xingwen County, Yibin City, Sichuan Province introduced a housing purchase subsidy policy, which includes encouraging enterprises to pay their wages in advance to pay down payments for housing purchases, and can apply for special funds to advance monthly payments.

Since last year, provident fund loan policies in many places have been optimized and adjusted. At the beginning of 2024, Shanghai, Heze and other places will also adjust housing provident fund personal housing loan policies. Regarding adjustments to provident fund loans or provident fund related policies in many places, a real estate industry insider told the Financial Federation reporter that this has a good policy-oriented effect, indicating that there is plenty of room for support for the Provident Fund policy, and it will have some inspirational significance for the subsequent implementation of policies in other regions.

“The further relaxation of local policies after the Spring Festival fully shows that the further rapid implementation of policies to support the release of everyone's demand for reasonable living and housing consumption will have a positive effect on boosting the subsequent market.” Yan Yuejin, research director of the Yiju Research Institute, said.

Mortgage interest rates have generally fallen, and the average interest rate for the first home in 20 cities has been lowered by at least 187 basis points since July 2021

In addition to the continuous adjustment and optimization of the down payment ratio for provident fund loans, interest rates on the country's first commercial home loan are also constantly being lowered. On February 20, the central bank announced the February LPR quotation. The 1-year term remained unchanged at 3.45%, and the LPR for the 5-year term or more dropped from 4.2% to 3.95%, a decrease of 25 basis points. On the same day, the Financial Services Association reporter learned from the staff of several banks in Beijing and Shanghai that mortgage interest rates at many banks followed the decline on the same day. Among them, the interest rate for the first home loan in Beijing's Chengliu district was adjusted to 4.05%, and the rate for the second home loan was adjusted to 4.55%; the interest rate for the first home loan outside the Chengliu district was adjusted to 3.95%, and the second set was adjusted to 4.5%. Before the adjustment, interest rates for the first home loan within the sixth district of the city and outside the sixth district of the city were 4.3% and 4.2%, respectively, while the second set was 4.8% and 4.75%, respectively.

Also, the interest rate for the first home loan in Shanghai fell to 3.85%, and the minimum for the second home was reduced to 4.15%. Before the adjustment, the interest rate for the first home loan in Shanghai was 4.1%, and the minimum for the second set was 4.4%. On February 21, a Guangzhou real estate agent also told the Financial Federation reporter that currently, the interest rate for the first residential home loan has been reduced to 3.85%, and the second set has been adjusted to 4.25%. Yan Yuejin said that according to past operating logic, banks will issue announcements and announce the latest minimum mortgage interest rate one after another the day after the LPR is lowered. This also means that starting February 21, buyers will enjoy lower mortgage interest rates, which in turn will increase their enthusiasm for buying a home.

The latest report by the Yiju Research Institute statistics the average interest rate for first home loans in 20 key cities across the country. If calculated from the highest interest rate in July 2021, the current mortgage interest rate has been lowered by at least 187 basis points. Based on the mortgage case of “1 million loan principal, 30 years of equal principal and interest”, the monthly deposit at the time of the highest mortgage interest rate was 5,722 yuan, but now it is 4,603 yuan, a cumulative reduction of 1,119 yuan. This shows that the mortgage interest rate policy has been adjusted and optimized in the last two years, and loans of 1 million yuan have been reduced by about 1,200 yuan per month. If you take out a loan of 5 million yuan in a big city, you can pay back about 5,500 yuan less every month.

Furthermore, the report shows that mortgage interest rates in 20 cities form an echelon and have several important characteristics. Among them, mortgage interest rates in all cities across the country have reached below 4.0%. Even in Beijing, the city with the highest mortgage interest rate, its mortgage interest rate will drop from 4.2% to 3.95%. Also, the city with the lowest mortgage interest rate can even reach 3.45%.

Wang Qing, chief macro analyst at Dongfang Jincheng, predicts that in addition to continuing to lower LPR prices for 5 years or more, which is the basis for pricing residential mortgage interest rates, the supervisory authorities may also push residential mortgage interest rates downward by lowering the lower interest rate limits for first home loans and second home loans. This is reflected in the recent Beijing and Shanghai property market policies and the “Notice on Adjusting and Optimizing Differentiated Housing Credit Policies” previously issued by the Central Bank and the General Administration of Financial Supervision.