Financial Association News October 25 (Reporter Zou Juntao) Financial Association News reporters learned today from several banks that some banks are actively preparing for specific operational guidelines for the implementation of the housing loan repricing cycle policy, and are expected to announce them externally in the future.

On October 25th, Industrial and Commercial Bank of China's customer service told Financial Association News reporters, 'For eligible existing housing loans, our bank is accelerating the formulation of specific operational guidelines under the guidance of the financial management department, and will support borrowers in negotiating with the banks to agree on the repricing cycle.' As for the specific time for the implementation guidelines to be announced, the other party stated it is not yet determined.

Meanwhile, CM Bank's customer service also told Financial Association News reporters, 'Our bank is actively preparing for the relevant work of redefining the 'repricing date', and will announce the specific arrangements later.'

However, Financial Association News reporters noted that responses from other banks in this regard were not satisfactory. Many head office customer services of commercial banks stated that they did not understand the relevant situation and asked reporters to consult the loan institution themselves.

In September of this year, the People's Bank of China issued an announcement to improve the pricing mechanism for commercial individual housing loans ('People's Bank of China Announcement [2024] No. 11'). The third article requires that 'Starting from November 1, 2024, for commercial individual housing loan borrowers with contracts stipulating floating interest rates, can negotiate with banks and financial institutions to agree on the repricing cycle. On the interest rate repricing date, the pricing benchmark is adjusted to the most recent one-month loan market quote rate. The interest rate repricing cycle and adjustment method should be clearly defined in the loan contract.'

At that time, officials from the People's Bank of China explained that one of the main adjustments and optimizations in the announcement was to 'remove the limitation that the shortest repricing cycle for housing loans is one year.' The officials said that eligible existing housing loan borrowers can adjust the repricing cycle while negotiating adjustments to the housing loan interest rate margin with commercial banks, allowing housing loan rates to timely reflect changes in the pricing benchmark (LPR) and facilitate monetary policy transmission.

This round of adjustments in existing housing loan rates only involves changes in points, and does not involve changes in the repricing cycle.

Journalists from Caijing noticed that many are calling for commercial banks to quickly implement the new policy of re-pricing the housing loans.

On October 25, several commercial banks adjusted the interest rates of existing housing loans, with many people expressing online that the adjustment was not as expected. "Why is my rate adjusted to 3.9%? But my colleague's is 3.65%?" "Shouldn't it be 3.3%? Why am I still at 3.55%?" After sharing their latest reduced interest rates, many netizens realized that everyone's rate is not the same.

Reporters from Caijing noticed that the focus of the problem lies in the fact that this adjustment does not include the recent LPR changes within the last re-pricing cycle. Several bank officials told reporters that most existing housing loans have floating interest rates determined by LPR and additional points, with a re-pricing cycle usually being one year.

It is understood that there are generally two types of repricing dates, one being January 1st each year, and the other corresponding to the loan disbursement date every month and day, according to the previous day's LPR for the repricing. The adjustment on October 25 only involves additional points, but everyone's repricing date may be different, leading to different LPR values. Therefore, although the additional points are all -30BP, the rates after today's adjustment may vary.

In the announcement "Comprehensive Implementation of the Adjustment of Individual Existing Mortgage Loan Interest Rates" issued by China CITIC Bank Corporation today, it is directly stated, "This rate adjustment adjusts the add/subtract value, without affecting the LPR value adjustment. LPR repricing is still done according to the original contract, LPR value is only updated on the repricing date."

Many netizens today expressed frustration online that their housing loan repricing date corresponds to the loan disbursement date each year, meaning they have to wait another half a year to enjoy the reduced housing loan rate of 3.3%.

Many netizens have already noticed the relevant documents previously released by the central bank and have started to approach commercial banks hoping to apply for changing the housing loan repricing date. However, as many commercial banks have not yet implemented the related policies, many netizens mentioned being rejected by the banks for their requests, believing that the banks do not intend to comply with the central bank's regulations.

Industry insiders suggest that regulators should strengthen guidance for commercial banks to implement.

"Currently, some commercial banks' slow performance in implementing the new policy of repricing housing loan interest rates has indeed attracted widespread attention and discussion in the market," said economist and new financial expert Yu Fenghui in an interview with Caixin today.

He mentioned that this delay stems from the complexity within banks regarding policy understanding and implementation, including technical system adjustments and redesign of business processes. Banks may need time to assess market risks and ensure the stable development of their business.

"In order to expedite banks' implementation of relevant policies, regulatory agencies can take a series of measures. Clarify policy orientation by issuing guiding documents, refining operational norms, and reducing banks' uncertainties. Establish effective communication mechanisms, hold regular meetings, and promptly address issues encountered by banks during the execution process," he stated.

Regarding the impact of the subsequent implementation of policies, Xi Xizhi Research's senior researcher Su Xiaorui, in an interview with Caixin, expressed that borrowers and banks can autonomously agree on the repricing cycle of housing loans, which not only gives homebuyers more autonomy, providing them with more choices, but also helps further alleviate the burden on homebuyers.