(Original title: The central bank is making a big announcement! Personal housing loans are facing major adjustments, mortgage interest rates are bidding farewell to the era of discounts, and LPR has become the pricing benchmark. These three major points are related to the wallets of "housing slaves")

After the unification of loan interest rates was launched, the adjustment policy for personal housing loan interest rates, which has the most widespread impact, was finally clarified.

On August 25, the central bank issued an announcement stating that in order to resolutely implement the positioning of "houses are for living, not for speculation" and the long-term management mechanism of the real estate market, and in the process of reforming and improving the loan market quotation rate (LPR) formation mechanism, ensure the effective implementation of regional differentiated housing credit policies and maintain the basic stability of personal housing loan interest rates. Starting from October 8, 2019, the interest rate of newly issued commercial personal housing loans will be based on the loan market quotation rate of the corresponding period in the last month as the pricing benchmark plus points.

After the pricing benchmark conversion, the interest rate of newly issued first-time personal housing loans nationwide shall not be lower than the LPR of the corresponding period (based on August 20, the LPR of more than 5 years is 4.85%); The interest rate of personal housing loans shall not be lower than the LPR of the corresponding period plus 60 basis points (5.45% calculated based on the LPR of more than 5 years on August 20), which is basically equivalent to the current actual lowest interest rate level of personal housing loans in my country. The interest rates of existing personal housing loans are still based on the original contract.

1. Starting from October 8, 2019, the interest rate for newly issued commercial personal housing loans will be based on the loan market quotation rate of the corresponding period in the last month as the pricing benchmark plus points. Before October 8, commercial personal housing loans that have been issued and commercial personal housing loans that have been contracted but not issued will still be implemented in accordance with the original contract.

2. The interest rate of the first commercial personal housing loan shall not be lower than the market quoted interest rate of the loan of the corresponding period, and the interest rate of the second commercial personal housing loan shall not be lower than the market quoted interest rate of the loan of the corresponding period plus 60 basis points. On the basis of the unified national credit policy and changes in the local real estate market situation, the provincial branches of the central bank determine the lower limit of the interest rate for the first and second commercial personal housing loans within their jurisdiction. On this basis, the bank reasonably determines the specific point value for each loan, and the point value is fixed during the contract period.

3. When borrowers apply for commercial personal housing loans, they can negotiate with banking financial institutions to agree on an interest rate repricing cycle. The minimum repricing cycle is 1 year. interest rate resetOn the price date, the pricing basis is adjusted to the LPR of the corresponding period in the latest month.

4. The interest rate for commercial housing purchase loans shall not be lower than the market quoted interest rate for loans of the corresponding period plus 60 basis points. The provident fund personal housing loan interest rate policy will not be adjusted for the time being.

Point 1: Mortgage interest rates will not drop in the short term due to the switching of pricing benchmarks

Although the LPR reform is to reduce the financing costs of the real economy, and the first quotation results after the reform announced on August 20 have indeed dropped compared with the loan benchmark interest rate of the corresponding period, it needs to be emphasized that this LPR reform mainly benefits the financing costs of the corporate sector, and the actual impact on the residential sector is not large. Especially in the context of recent tightening of real estate controls again, the industry generally believes that mortgage interest rates in most cities will not fall in the short term, and may even rise slightly further.

A mid-level person from a joint-stock bank told China Securities Journal that for banks, the interest rates for small and micro enterprise loans and personal housing mortgage loans are mainly determined based on the relationship between supply and demand and are less affected by the benchmark interest rate. Banks generally determine the actual interest rate of the loan first, and then fill out the loan contract by inferring the multiple relationship between the actual interest rate and the benchmark interest rate. Therefore, even if new loans are required to be priced based on LPR in the future, the actual situation will have little impact on such loans in the short to medium term.

According to the announcement of the central bank, starting from October 8, 2019, the interest rate of newly issued commercial personal housing loans will be based on the loan market quotation rate of the corresponding period in the last month as the pricing benchmark plus points. The points added should comply with the requirements of national and local housing credit policies.

In other words, the official stipulates the "lower limit" for the interest rate of new personal housing loans issued by banks, that is, the LPR interest rate plus points for the corresponding period in the last month. The "lower limit" of the plus point consists of two parts. The first part is the national minimum standard stipulated by the central bank. The second part is the provincial branch of the central bank determines the lower limit of the interest rate for commercial personal housing loans within its jurisdiction based on changes in the local real estate market situation.

Specifically, the central bank announced:

1. The interest rate for the first set of commercial personal housing loans shall not be lower than the market quoted interest rate for loans of the corresponding period, and the interest rate for the second set of commercial personal housing loans shall not be lower than the market quoted interest rate for loans of the corresponding period plus 60 basis points.

2. The provincial-level branches of the central bank should follow the principle of "city-specific policies" to guide the self-regulatory mechanism of market interest rate pricing in each province. On the basis of the unified national credit policy and the changes in the local real estate market situation, determine the lower limit of the interest rate increase for the first and second commercial personal housing loans in the jurisdiction.

The relevant person in charge of the central bank explained that after the pricing benchmark is converted, the interest rate of newly issued personal housing loans nationwide shall not be lower than the LPR of the corresponding period (based on the LPR of more than 5 years on August 20, which is 4.85%); the interest rate of the second personal housing loan shall not be lower than the LPR of the corresponding period plus 60 basis points (based on the LPR of more than 5 years on August 20, which is 5.45%). It is basically equivalent to the current actual lowest interest rate level for personal housing loans in my country. Compared with before the reform, when households apply for personal housing loans, their interest payments are basically unaffected.

Looking at the before and after comparison, for the pricing benchmark for first-time homes, the 5-year or above LPR on August 20 was only 5bp lower than the 5-year loan benchmark interest rate of 4.9%; for the pricing of second-home homes, the "lower limit" interest rate level of 5.45% is equivalent to an increase of 11% on the 5-year benchmark interest rate, which is lower than the 20% increase in the benchmark currently implemented in most cities.

But does this mean that newly issuedWill the housing loan interest rate be lower than the original one? I'm afraid it will be difficult in the short term.

Not long ago, Liu Guoqiang, deputy governor of the central bank, made it clear that the focus of interest rate liberalization is to reduce the financing costs of the real economy. For the real estate market, we must resolutely implement the requirements of the Political Bureau meeting of the Central Committee on July 30, adhere to the positioning of "houses are for living in, not for speculation", not use real estate as a means of short-term economic stimulation, ensure the effective implementation of differentiated housing credit policies, and keep personal housing loan interest rates basically stable. The mortgage interest rate has changed from the reference benchmark interest rate to the reference LPR, but the final loan interest rate level must remain basically stable.

“In this interest rate integration reform, the interest rate of mortgage loans has changed from the benchmark interest rate to the reference LPR. The reference benchmark has changed, but the interest rate level cannot fall.” Liu Guoqiang said.

Since July, as real estate control policies have become stricter again, first-home loan interest rates in many cities have increased. According to the analysis of Rong360 analyst Li Wanfu, on the one hand, in the future, banks will accelerate the adjustment of credit structure, reduce the credit resources occupied by the real estate industry, and invest more credit funds in the manufacturing industry, small and medium-sized enterprises currently encouraged by the state; on the other hand, real estate regulation will not be relaxed in the short term, the financial environment is relatively tight, and more cities may continue to tighten mortgage policies in the future.

In addition, how will the existing housing loan interest rates be adjusted? The central bank stated that it will still implement the original contract. However, many analysts believe that existing loan contracts will gradually and orderly switch pricing standards in the future. Central Bank Governor Yi Gang once said that loan interest rates have actually been liberalized, but further reform ideas can be explored, such as studying no longer publishing the loan benchmark interest rate. Ming Ming, deputy director of the CITIC Securities Research Institute, once told reporters from Brokerage China that in the early stages of loan interest rate integration, existing loan contracts are not suitable for "one size fits all" switching. In the early stage, consideration can be given to promoting the switching of existing loan contracts step by step by type and term. From the perspective of loan types, it is best to adjust corporate loans first, because the scale of corporate loans is relatively concentrated and enterprises are more receptive; then adjust resident loans, especially housing mortgage loans, after a period of time. From the perspective of loan period, you can consider adjusting short-term loans first and then adjusting long-term loans.

Point 2: Gone are the "discounted" housing loan interest rates from the base interest rate

Although the central bank stated that compared with before the reform, when households apply for personal housing loans, interest payments are basically unaffected. However, due to the "city-specific implementation" of real estate policies, the actual impact on different cities will be different.

The central bank stipulates that the interest rate for the first set of commercial personal housing loans shall not be lower than the market quoted interest rate for loans of the corresponding period, and the interest rate for the second set of commercial personal housing loans shall not be lower than the market quoted interest rate for the corresponding period of loans plus 60 basis points. This means that the "discount" situation in which first-time home interest rates have dropped below the benchmark in some cities in the past and present will be gone forever.

Take Shanghai as an example. Data monitored by Rong360 Big Data Research Institute shows that the average interest rate for first-time home loans in Shanghai was 4.84% in July, down 7 basis points from the previous month. The interest rate for first-time home loans in Shanghai fell below the benchmark, surpassing Xiamen and becoming the lowest in the country. Among the 30 bank branches monitored in Shanghai, 7 banks lowered their first-home loan interest rates in July, and 3 banks raised them. After the adjustment, the number of banks offering a 95% discount (i.e. 4.655%) on the benchmark interest rate has increased to 17, and some banks can even offer a 10% discount (4.41%).

Therefore, the interest rate for newly issued first-home housing loans in Shanghai from October 8 will be as low as 4.85%, which is higher than the benchmark 95% discount level of 4.655%.0.195 percentage points.

Point 3: The interest rate of newly issued housing loans can be adjusted once a year

Although there will no longer be a "discounted" housing loan interest rate from the benchmark interest rate in the future, it does not mean that housing loan interest rates will not decrease in the long term. According to regulations, the interest rate of newly issued housing loans will be adjusted once a year.

The central bank announced that when borrowers apply for commercial personal housing loans, they can negotiate with banking financial institutions to agree on an interest rate repricing cycle. The minimum repricing cycle is 1 year.

Interest rate repricing means that the lending bank determines a new loan interest rate based on changes in the pricing basis according to the calculation method agreed in the contract. The announcement clarified that the personal housing loan interest rate repricing cycle can be negotiated and agreed upon by both parties, with the minimum being one year and the maximum being the contract period. Each time the interest rate is repriced, the pricing basis is adjusted to the LPR of the corresponding period in the latest month.

However, it is worth noting that the portion of the housing loan interest rate that can be adjusted each year is limited to the pricing base part, that is, the LPR of the corresponding period in the last month, while the additional portion based on the LPR is fixed during the contract period.

After the reform, the LPR quotation cycle will be updated once every month on the 20th. For home loan borrowers, the loan interest rate can be adjusted once a year in the future. Some analysts believe that although under the policy tone of "housing for living, not speculation", it is difficult for home loan interest rates to fall in the short to medium term, but in the long term, as global central banks enter the monetary easing cycle again, interest rates will continue to decline. Correspondingly, the change trend of LPR will also be slowly downward, which will drive loan interest rates downward.

Therefore, the interest rate of newly issued housing loans can be adjusted once a year based on the latest LPR quotation. In the long run, it may be beneficial to reduce the borrower's comprehensive interest expenses.