Caixin News on November 8th (Reporter Cao Yunyi) Domestic mortgage rates have entered the "2" range for less than half a month, and many places have successively adjusted mortgage rates. Today, Caixin News learned from several banks in Hangzhou that the new mortgage rates in Hangzhou will be implemented at 3% starting today. Just yesterday, many banks in Nanjing, Suzhou, and other places also stated that the minimum interest rate for first home loans has been raised from 2.95% to 3.0%.

Industry insiders stated that the reason for raising the interest rate for first home loans is the reverse inversion between the housing provident fund loan interest rate and the mortgage rate, but it should not be understood as a policy tightening. Buyers need to pay attention to some market changes.

Many places raise the lower limit of the interest rate for first home loans.

"We received a notice yesterday afternoon that starting today, the interest rate for first home loans is 3.0%, adjusted from 2.9%." A mortgage manager at a state-owned major bank in Hangzhou told Caixin News.

After the 25 basis point (BP) drop in the Loan Prime Rate (LPR) in October, domestic mortgage rates generally entered the range of "2", and even reached as low as 2.65%. However, it has been less than half a month since surpassing "3", and cities are gradually joining the wave of adjusting mortgage rates, including Hangzhou, Nanjing, Suzhou, and other regions.

"Starting from Wednesday, the interest rate for the first home loan will be 3.6%, reduced by 60 basis points, increased from 2.95% to 3%. If you have not yet finalized the loan, it will be calculated based on the new rate, and all banks in the city will implement a uniform standard." A mortgage manager at a state-owned major bank in Suzhou told Caixin News.

Caixin News reporters confirmed with many banks in Nanjing, Suzhou, and other places that the minimum interest rate for first home loans has been raised from 2.95% to 3.0%, and there may be further increases in the future. A personal loan manager at a joint-stock bank in Nanjing stated that the 3.0% minimum interest rate is uniformly implemented in Jiangsu Province.

Prior to this, after the 25 basis points reduction in LPR on October 21st, the LPR for mortgages over 5 years is 3.60%. The housing loan interest rate in Nanjing has decreased along with the LPR reduction, with the first home mortgage rate at 2.95%. "After signing the mortgage contract, I received a notification from the banks requiring an increase in basis points. When I submitted the documents, the interest rate was still 2.95%. Today, I received a notice to change it to 3.0%," said a home buyer Wu Wei (pseudonym) from Nanjing.

"I received a notification on Tuesday night to adjust to 3.0%, and immediately executed it the next day. Recently, I have been working overtime on approvals and communicating with customers, notifying them to come and amend the contracts." A loan manager from a city commercial bank in Nanjing said:" The notice we received also mentioned that we need to disburse the loans as soon as possible, and it may be raised to 3.05% at any time in the future."

The increase in mortgage rates may be related to the reversal of housing provident funds.

Industry experts believe that under the current stabilizing trend in the real estate market, some cities are raising the lower limits of mortgage rates, which carries a certain significance as an indicator.

Yan Yuejin, Deputy Director of the Shanghai E-House Real Estate Research Institute, told Caixin reporter, "The current rate hike should be understood as the 'bottoming out' of mortgage rates, but not as a tightening of mortgage rate policies. The current hike is due to the reversal between housing provident fund loan rates and mortgage rates, as well as the 25 basis points reduction in LPR operation. Therefore, the increase in commercial loan rates is related to such factors, but should not be construed as a policy tightening."

Regarding the phenomenon of the reversal between commercial loan rates and housing provident fund rates, Liu Lu, Professor of Economics at Southwestern University of Finance and Economics, believes that there should be a certain gap between commercial loan rates and housing provident fund rates, which is determined by the positioning of the housing provident fund. 'Housing provident fund loans have the attribute of inclusive finance, playing an important role in promoting housing market stability and alleviating the burden on home buyers. It is necessary to maintain a certain interest rate differential between housing provident fund loans and commercial loans for the long-term stability of the housing market.'

Some experts also point out that there is a high possibility of lowering the housing provident fund loan rates in the future. Li Yujia, Chief Researcher at the Guangdong Housing Policy Research Center, said that lowering the housing provident fund loan rates can widen the gap with commercial loans, leverage the protective advantages of housing provident fund loans, and maintain support for the housing needs of low-income workers by keeping at least a one percentage point difference from commercial loan rates.

Yan Yuejin believes that home buyers should pay attention to certain market changes, such as the cessation of the real estate subsidy policy in Lanxi, Zhejiang, and the increase in mortgage rates in Guangzhou. This implies that the current policies are the most accommodating, and home buyers need to fully utilize and benefit from these policies actively to enter the market and make use of the hard-won policy support.