China’s mortgage interest rates will be lowered again in the New Year of 2025

Good news at the beginning of the New Year. On January 1, 2025, the interest rates of previously issued housing provident fund personal housing loans will be lowered. If the repricing date of commercial mortgages is chosen on January 1, homebuyers who refer to the floating interest rate of the LPR quotation will enjoy the interest rate of LPR-30 basis points in December, that is, 3.3%.

The LPR for more than 5 years announced in December was 3.6%, which remained unchanged for three consecutive months. In 2024, the LPR quotation for more than 5 years will be adjusted in February, July and October, respectively, with a total reduction of 60 basis points. The reporter did some calculations. Taking a loan amount of 1 million yuan and a loan period of 30 years as an example, when the mortgage interest rate is 3.9%, the monthly payment is 4,717 yuan, and when the mortgage interest rate is 3.3%, the monthly payment is 4,380 yuan, a difference of more than 300 yuan.

Previously, most people’s repricing date was January 1 or the loan issuance date, that is, once a year. Starting from November 1, 2024, many banks have successively implemented a new pricing mechanism for commercial personal housing loan interest rates. Lenders can ask banks at any time to adjust the repricing cycle to three months or six months, or keep it for one year.

After the central bank adjusted the existing mortgage interest rates in batches in October 2024, most borrowers have adjusted to LPR-30 basis points in batches, and users can also choose a three-month or six-month repricing cycle. Therefore, existing mortgage customers whose repricing dates were April 1, July 1, and October 1 last year may also usher in mortgage interest rate cuts on January 1. It is expected that most borrowers will not see changes in commercial mortgage interest rates on the first day of the new year.

Industry insiders predict that in 2025, under a moderately loose monetary policy, the policy interest rate is expected to continue to decline, and the LPR quotation will be guided to follow up and decline. The reduction in mortgage interest rates will help promote the recovery of the real estate market, release residents’ consumption potential, and promote the recovery and growth of the consumer market.