On the day of "5·20", there is another good news for the mortgage loan family.
Today (May 20), the new loan market quotation rate (LPR) was released. Among them, the LPR over 5 years was 4.45%, compared with 4.6% previously.
This is the first time since the reform of the LPR quotation mechanism in August 2019 that the 5-year variety has been individually lowered. Among the previous 6 adjustments, either only the 1-year variety was lowered, or the 1-year variety was adjusted twice as much as 5 annual.
Previously on May 15, the central bank and the China Banking and Insurance Regulatory Commission issued a major policy on housing loans: the reference standard for the country's first commercial personal housing loan interest rate was reduced by 20 basis points. At that time, based on the current LPR of 4.6% for five years and above, the equivalent first home loan interest rate could be as low as 4.4%. After the LPR of more than 5 years dropped today, it can be as low as 4.25%.
Based on the calculation of a 1 million yuan loan, a 30-year loan term, and equal principal and interest repayment methods, the interest payment will be reduced by 42,000 yuan at maturity, and the monthly payment will be reduced by 118 yuan, which reduces the home purchase cost to a certain extent.
As of press time, the A-share real estate sector bucked the trend and fell, ranking last among the Shenwan first-tier industries; Hong Kong stocks real estate and construction industry rose by 0.74%, but the increase ranked last among all major industries. The spot exchange rate of
offshore RMB was reported at 6.742, down 129 basis points.
htmlLPR fell again in May
Since the beginning of this year, LPR has only experienced a downward adjustment in January. The 1-year and 5-year and above LPR fell by 10 and 5 basis points respectively to 3.7% and 4.6%, and have remained unchanged since then.
Previous changes in LPR Source: Wind
Today, the closely watched loan prime rate (LPR) for May was released. After remaining unchanged for three consecutive months, the LPR ushered in a downward adjustment.
Source: China Money Network
The loan market quoted interest rate (LPR) on May 20, 2022 is: the 1-year loan market quoted rate (LPR) is 3.7%, the same as the previous month, and the 5-year LPR is 4.45%, which is higher than the previous month. The monthly rate of 4.6% was significantly reduced by 15 basis points.
Since the LPR quotation is linked to the medium-term lending facility (MLF) interest rate, the market is paying attention to the central bank's operating interest rate and also includes a prediction of the LPR quotation.
On May 16, the central bank announced that in order to maintain reasonable and sufficient liquidity in the banking system, the central bank will carry out 100 billion yuan of MLF operations on May 16 (including the renewal of the MLF expiration on May 17) and 10 billion yuan of open market reverse operations. For repurchase operations, the winning bid rates remain unchanged.
Although the MLF interest rate, which is the medium-term policy rate, has not changed, the market has strong expectations for a reduction in the LPR in May due to factors such as RRR cuts and deposit cost reductions.
CICC believes that LPR is formed by adding points to the MLF interest rate, and the extent depends on the cost of funds, market supply and demand, risk premium , etc. Referring to historical experience, even if the MLF remains unchanged, reducing the cost of debt by reducing the RRR by 1ppt can trigger an LPR increase point adjustment to the minimum step size (5bps). Therefore, although the possibility of an MLF reduction is low in the short term, under the influence of factors such as RRR cuts, lower deposit costs, and weak loan demand, it is not ruled out that the LPR will trigger an autonomous reduction of 5bps this year.
CITIC Securities analysis said that the central bank mentioned in its answer to a reporter's question on financial data that in the future it will "give full play to the effectiveness of the loan market quotation rate reform, give full play to the role of the market-based adjustment mechanism of deposit interest rates, promote the reduction of bank liability costs, and then drive the reduction of enterprises Financing costs". Considering that the central bank's deposit reform in April reduced the national weighted average deposit interest rate by 10bps, the LPR interest rate is expected to be lowered in May.
The cost of home purchase has further dropped
html On May 15, the Central Bank and the China Banking and Insurance Regulatory Commission issued the "Notice on Adjusting Issues Related to Differentiated Housing Credit Policies" (hereinafter referred to as the "Notice"). The notice pointed out that for households purchasing ordinary self-owned houses with loans, the lower limit of the commercial personal housing loan interest rate for the first house will be adjusted to no less than 20 basis points minus the market quotation rate of the loan of the corresponding period, and the lower limit of the commercial personal housing loan interest rate policy for the second house will be adjusted. Follow current regulations.Calculated based on the LPR of 4.6% for 5 years and above at that time, it is equivalent to the interest rate of the first ordinary home loan being as low as 4.4%.
htmlOn May 18, some media learned from the mortgage departments of many banks in Tianjin and Suzhou that the lowest first home loan interest rate of some banks can be as low as 4.4%. Staff from some major state-owned banks in Suzhou also told reporters that the interest rate on first home loans has dropped to a minimum of 4.4%.After today’s reduction in the LPR of more than 5 years, the interest rate for first home loans can be as low as 4.25%.
Why did the Central Bank and China Banking and Insurance Regulatory Commission lower the lower limit of mortgage interest rates at this time? Industry experts pointed out that personal housing loan interest rate policy is an important part of the long-term real estate mechanism and differentiated housing credit policy.
The Central Bank and the China Banking and Insurance Regulatory Commission stated that in order to adhere to the positioning of "housing for living, not speculation", fully implement the long-term mechanism for real estate, support various localities to improve real estate policies based on local realities, support rigid and improved housing demand, and promote the stable and healthy development of the real estate market, in accordance with According to the relevant arrangements of the State Council, a notice was issued to clarify matters related to the adjustment of the lower limit of the commercial personal housing loan interest rate policy.
Data released by the central bank showed that RMB loans increased by 645.4 billion yuan in April, a decrease of 823.1 billion yuan year-on-year. Household loans decreased by 217 billion yuan, a decrease of 745.3 billion yuan year-on-year. Among them, housing loans decreased by 60.5 billion yuan, a year-on-year decrease of 402.2 billion yuan.
Zhou Maohua, a macro researcher at the Financial Market Department of China Everbright Bank, said in an interview with Daily Economic News that due to the recent interference from factors such as the spread of the epidemic, the recovery of real estate in some areas of the country is not ideal. Resident credit declined in April, reflecting that domestic real estate demand is still downturn. Domestic lowering of the lower limit of mortgage interest rate pricing allows regional commercial banks to flexibly adjust mortgage interest rates based on local property market supply and demand conditions and urban regulation requirements, which is expected to accelerate the restoration of balance in the property market.
In addition, the "Statistical Report on Loan Investment by Financial Institutions in the First Quarter of 2022" released by the central bank showed that real estate development loans increased month-on-month in the first quarter, and personal housing loan interest rates fell. The balance of personal housing loans was 38.84 trillion yuan, a year-on-year increase of 8.9%, and the growth rate was 2.3 percentage points lower than the end of the previous year. In March, the interest rate for newly issued personal housing loans was 5.42%, 17 basis points lower than at the beginning of the year.
It is worth mentioning that recently, the central bank held a special meeting to emphasize the implementation of a prudent real estate financial management system, timely optimization of real estate credit policies, maintaining stable and orderly real estate financing, and supporting rigid and improved housing demand.
Editor | Lu Xiangyong Du Hengfeng
Proofreading | Duan Lian
Cover image source: Daily Economic News Photo by Liu Guomei
Daily Economic News is synthesized from Mijing App, China-Singapore Jingwei, etc.
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