During the bulk adjustment phase, first-time, second-time, and above existing home loans can all be adjusted. Existing home loans that have already had markup adjustments in the previous year are also included.

After the bulk adjustment, the interest rates of existing house loans for borrowers will generally be reduced to no less than the Loan Prime Rate (LPR) minus 30 basis points, that is, "LPR-30 basis points". During the bulk adjustment and regular adjustment phases, there will no longer be a distinction between first homes and second homes (except for cities with a minimum interest rate policy for mortgages that distinguish between first and second homes). Therefore, for existing house loans of second homes and above in Beijing, Shanghai, and Shenzhen, consideration needs to be given to the local policy floor.

The central bank also specifies that starting from October 2024, in the first month of each quarter, the People's Bank of China will announce on its official website the weighted average interest rate of newly issued commercial individual housing loans nationwide in the previous quarter for banks and borrowers to reference.

The timing of this round of adjustments to existing house loan interest rates are as follows:

1. Main commercial banks will generally publish specific operational details for each bank no later than October 12, 2024. After October 12, borrowers can contact the banks to understand the adjustment details.

2. Main commercial banks should uniformly implement bulk adjustments to existing house loans (including first homes, second homes, and above) by October 31, 2024. The Initiative explicitly encourages all commercial banks to facilitate borrowers by processing through online channels such as online banking and mobile banking with a "one-click" operation.

3. After November 1, both lenders and borrowers can negotiate to adjust the point spread.

Bulk adjustments before October 31st can be negotiated starting November 1st.

The 'Initiative' specifies that by October 31, 2024, commercial banks will conduct another round of bulk adjustments on eligible existing home loans, reducing the high interest rates to around the national average for new home loans, allowing borrowers to benefit sooner.

Starting from November 1, 2024, eligible borrowers can negotiate adjustments to the mortgage interest rate markups with commercial banks in a market-oriented manner, and can also negotiate adjustments to the repricing cycle.

During the bulk adjustment phase, first-time, second-time, and above existing home loans can all be adjusted. Existing home loans that have already had markup adjustments in the previous year are also included.

For newly signed individual housing loan contracts, starting from November 1, both parties can autonomously negotiate the repricing cycle. The repricing cycle can be on an annual, semi-annual, quarterly basis, etc. It should be noted that in a declining interest rate phase, the shorter the repricing cycle, the earlier borrowers can enjoy lower rates, but in a rising interest rate phase, borrowers will have to bear higher rates sooner.

For most borrowers, the existing home loan rates will be reduced to no less than 30 basis points below the Loan Prime Rate (LPR).

The 'Initiative' states that during the bulk adjustment phase, commercial banks will adjust the Loan Prime Rate markup, which is higher than the 'reduced by 30 basis points' markup of existing home loans, to not be lower than the 'reduced by 30 basis points' level.

In simple terms, borrowers' existing home loan rates will generally be reduced to not less than the Loan Prime Rate (LPR) minus 30 basis points. For second and above existing home loans in Beijing, Shanghai, and Shenzhen, consideration must be given to the local policy floor.

It is worth noting that due to different repricing dates, the interest rates of different borrowers will vary after the batch adjustment. After repricing, the recent decrease in LPR within the last pricing cycle will also be reflected, and the interest rates of borrowers participating in this batch adjustment will be adjusted to levels near the new national mortgage rates.

If calculated according to the current LPR, with January 1, 2025 as the repricing date, assuming the borrower's pre-adjustment deposit mortgage rate is LPR + 55 basis points, that is 4.75% (4.2% + 55 basis points). After the batch adjustment on October 30, 2024, the outstanding mortgage rate will decrease to 3.9% (4.2% - 30 basis points), and after the repricing on January 1, 2025, it will decrease to 3.35% (3.65% - 30 basis points).

For fixed-rate existing housing loans, convert to an incremental form based on the latest LPR, then adjust the incremental level to LPR minus 30 basis points. For example, for a fixed-rate existing housing loan with an interest rate of 4%, and the latest LPR for more than 5 years is 3.85%, first convert the fixed rate to 4% (LPR plus 15 basis points), then adjust the "add 15 basis points" to "subtract 30 basis points", resulting in 3.55%.

For cities where the minimum policy interest rate for new mortgage loans is still set, the adjusted incremental level must not fall below the minimum. For example, the lower limit of the additional points for a second-home mortgage loan in Beijing is LPR minus 5 basis points within the Fifth Ring Road and LPR minus 25 basis points outside the Fifth Ring Road. The corresponding second-home mortgage rates will be adjusted to LPR - 5 basis points and LPR - 25 basis points during the batch adjustment.

Due to the complexity of this adjustment, authoritative experts suggest that after October 12th, borrowers should pay attention to the specific adjustment details of their lending banks.

How to calculate the adjusted existing housing loan rates? Understand with one picture

For borrowers on how to adjust existing housing loan rates, the journalist has compiled a table based on different repricing dates (the time interval for interest rate adjustments following the pricing benchmark in floating-rate loan contracts) and the interest rates after different range housing loan additions:

Assuming a batch adjustment on October 31, 2024, and assuming that the 5-year LPR announced on October 21, 2024, dropped by 0.2 percentage points following the central bank's policy rate, from the current 3.85% to 3.65%, remaining unchanged thereafter. For example:

Due to the decrease of 0.25 percentage points and 0.1 percentage points in the LPR for February 2024 and July 5-year period respectively, for repricing dates on January 1st each year, the adjusted interest rate is 3.9%, and after the repricing of LPR on January 1st next year, the interest rate is 3.35%.

For repricing dates based on the day of contract issuance, they are divided into the following four situations:

For repricing dates from October 21st to October 31st, the adjusted interest rate is 3.35% (LPR at that time was 3.65% - 0.3%).

For repricing dates from November 1st to December 31st, and from January 2nd to February 19th, the adjusted interest rate is 3.9% (LPR at that time was 4.2% - 0.3%), and the interest rate after repricing is 3.35% (LPR at that time was 3.65% - 0.3%).

For repricing dates from February 20th to July 21st, the adjusted interest rate is 3.65% (LPR at that time was 3.95% - 0.3%), and the interest rate after repricing is 3.35% (LPR at that time was 3.65% - 0.3%).

For repricing dates from July 22nd to October 20th, the adjusted interest rate is 3.55% (LPR at that time was 3.85% - 0.3%), and the interest rate after repricing is 3.35% (LPR at that time was 3.65% - 0.3%).

If calculated based on the current LPR, with a repricing date of January 1st, 2025, assuming the borrower's original deposit mortgage rate was LPR + 55 basis points, i.e., 4.75% (4.2% + 55 basis points). Then after the bulk adjustment on October 30th, 2024, the existing housing mortgage rate will decrease to 3.9% (4.2% - 30 basis points), and after the repricing on January 1st, 2025, it will decrease to 3.35% (3.85% - 55 basis points).

Taking a 1 million yuan, 25-year, equal principal and interest repayment existing housing mortgage as an example, assuming the borrower's mortgage rate decreases from 4.4% to 3.55%, it can save the borrower approximately 5600 yuan in interest expenses annually.

Due to the complexity of this adjustment, authoritative experts suggest that after October 12th, borrowers should pay attention to the specific adjustment details of their lending banks.