The Interest Rate on Existing Mortgage Loans Decreases as “Second Mortgages” are Converted to “First Mortgages”
By Du Chuan, China Business News
Many borrowers who followed the bank’s requirements and submitted the necessary documents are now benefiting from automatic adjustments to their loan contracts and repayment plans as of October 25.
“This morning, I received a text message from the bank informing me that my mortgage interest rate has dropped to 4.85%,” said Ms. Bai, a Beijing resident, as she shared her successful experience of converting her second home into her first home with a reporter from China Business News.
The process of adjusting the interest rates on existing mortgage loans is currently underway. Starting from October 25th, various banks have opened channels for adjusting mortgage interest rates for those who have converted their second homes into first homes. Many borrowers who submitted the required documents, loan contracts, and repayment plans in advance saw their changes implemented automatically on the specified date.
The policy of converting “second mortgages to first mortgages” has now begun to take effect.
“I submitted the application offline at the Bank of China on October 16,” recalled Ms. Bai, who had previously arranged the offline processing time with the bank through WeChat. She brought her ID card, household register, and original marriage certificate to the bank for the necessary procedures.
“I filled out an application form for adjusting the interest rate of my existing personal housing loan. The entire process only took a few minutes. The bank told me that I could check the status online on October 25th,” Ms. Bai informed reporters.
According to the notice issued by the People’s Bank of China and the State Financial Supervision Administration, borrowers with existing commercial personal housing loans for their first homes can apply to the lending financial institution for a new loan that replaces their existing first home loan. This adjustment applies to first home loans, second home mortgages converted to first home loans, and commercial personal home loans in provident fund portfolio loans.
For first home loans, the interest rate adjustment does not require borrowers to actively apply. Banks have already adjusted the interest rates uniformly for qualifying loans on September 25th.
Following the implementation of the “identify a house but not a loan” policy, existing mortgage customers who meet the criteria for converting their second homes to first homes need to actively apply to the lender and provide the necessary supporting documents to modify and adjust the interest rate of their existing mortgage.
For example, borrowers are required to submit proof of identity, a letter of commitment, family house number inquiry results or certification to apply for a loan interest rate adjustment, as previously announced by many banks.
Ms. Bai received a text message from the bank stating, “Starting from October 25th, 2023, the interest rate for your personal housing loan ending in **** will be adjusted from LPR+105 basis points to LPR+55 basis points. You can log in to the Bank of China mobile banking app to check the adjustment status under ‘Loan-Mortgage Interest Rate Adjustment’.”
When checking the mobile app, it showed that the adjustment to the current mortgage interest rate has been completed, with an adjusted interest rate of 4.85%. Prior to the adjustment, the interest rate calculation method was LPR+105 basis points, which has now been changed to LPR+55 basis points.
The entire adjustment process is expected to be completed within a month.
Not only Ms. Bai but also many other borrowers who are converting their second mortgages to first mortgages received adjustment text messages from the bank on October 25th. However, the extent of the interest rate reduction varies among different lenders due to different lower limits of mortgage interest rates in different regions.
For example, a netizen in Zhejiang posted content on China Construction Bank’s mobile app, showing that the current interest rate has been successfully adjusted. The netizen’s original adjusted interest rate level was LPR+79 basis points, which has now been changed to LPR+0 basis points, resulting in an annual interest rate of 4.3%.
Another citizen from Tianjin expressed, “I received a text message from the bank early in the morning, right on time. After waiting for more than a month, it finally arrived, and the interest rate was reduced from 4.2% to about 400 yuan per month. Calculating for the remaining 22 years, I saved more than 100,000 yuan. Thanks to the government.”
A netizen from Guangzhou shared their entire online application process and supplementary information.
The netizen stated, “After the Agricultural Bank of China’s app introduced the mortgage modification function on September 25th, I quickly uploaded my personal real estate information. It was under review until October 24th. During this period, I checked it multiple times and was worried. On the 20th, the Agricultural Bank of China’s credit center staff called us using their mobile phone number to inform us that we were missing a photo of the back of our ID card. After submitting the missing document, the modification was finally successful, as announced on October 25th. From now on, we can save about 300 yuan per month for other expenses. Thanks to the country.” This Guangzhou citizen’s mortgage interest rate has been adjusted from 5.1% to 4.3%.
According to the latest data, over 22 trillion yuan in existing mortgage interest rates have been reduced, benefiting approximately 50 million households and 150 million people. The average interest rate has decreased by 0.73 percentage points. As a result, borrowers’ interest expenses have been reduced by 160 billion yuan per year, leading to an average annual reduction of 160 billion yuan in mortgage loan interest rates.
“Currently, the vast majority of borrowers have already started enjoying the benefits,” said Zou Lan, director of the Monetary Policy Department of the People’s Bank of China, during the third quarter financial statistics conference. “For other borrowers who still need to provide the required certifications, major banks will also complete the adjustment within a month once the materials and the borrowers’ situations are confirmed.”
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(Original title: It’s gone down! The interest rate on existing mortgage loans “converted from a second mortgage to a first mortgage” has been adjusted →)
Introduction: For many borrowers who have submitted matching materials in accordance with bank requirements at an early stage, their loan contracts and repayment plans have been automatically changed on the 25th.
Author | Du Chuan China Business News
“I received a text message from the bank this morning reminding me that my mortgage interest rate has dropped to 4.85%.” On the morning of October 25, Ms. Bai, who lives in Beijing, shared her experience of successfully transforming her second home. into the first home with a reporter from China Business News.
The process of adjusting interest rates on existing mortgage loans is ongoing. The reporter learned that various banks have opened the “second home to first home” mortgage interest rate adjustment channel in a row from October 25. Many borrowers have submitted matching materials, loan contracts and repayment plans in accordance with the bank’s requirements in the early stage The changes were implemented automatically on the 25th.
The “second package to the first time” policy has started to decline.
“On October 16, I submitted the application offline at the Bank of China.” Ms Bai remembered that she had earlier agreed on the offline processing time with the bank on WeChat, and brought her ID card, household register, and the original marriage certificate to the bank to deal with the relevant business.
“At that time, I also filled out an application form for adjusting the interest rate of an existing personal housing loan. The whole process only took a few minutes. The bank said you can check it online on October 25.” Ms Bai told reporters.
According to a notice issued by the People’s Bank of China and the State Financial Supervision Administration, starting from September 25, 2023, borrowers with existing commercial personal housing loans for their first homes can apply to the lending financial institution, and will the financial institution issues a new The loan replaces the existing first home commercial personal home loan. This adjustment covers first home loans, second home mortgages converted to first home loans, and commercial personal home loans in provident fund portfolio loans.
Among them, the interest rate adjustment for first home loans does not require borrowers to actively apply. On 25 September, banks have uniformly adjusted the interest rates for loans that meet the conditions in batches.
Following the implementation of the “identify a house but not a loan” policy, existing mortgage customers who meet the “second home to first home conversion” criteria will need the lender to make an active application to the bank and provide materials auxiliary to be completed. modify and convert the interest rate of the existing mortgage.
For example, according to previous announcements issued by many banks, borrowers need to submit proof of identity, letter of commitment, family house number inquiry results or certification to apply for a loan interest rate adjustment.
The content of the text message provided by Ms. Fault showing: “Starting from October 25, 2023, the operating interest rate of your personal housing loan ending in **** will be adjusted from LPR+105 basis points to LPR+55 basis points. You can log in to Bank of China On the mobile banking APP, check the adjustment status in ‘Loan-Mortgage Interest Rate Adjustment’.”
The content of the mobile APP shows that the adjustment to current mortgage interest rates has been completed. The adjusted delivery interest rate is 4.85%. The interest rate calculation method before the adjustment is LPR + 105 basis points, and the interest rate calculation method after adjustment is LPR + 55 basis points.
Adjustments will be completed within a month
Not only Ms Bai, but also many netizens who are “converting their second mortgage to their first mortgage” received adjustment text messages from the bank on the 25th. However, as the lower limits of mortgage interest rates applied in different regions are different, the extent of the reduction in mortgage interest rates for different lenders is also different.
For example, some netizens in Zhejiang posted content on China Construction Bank’s mobile app, showing that the status of the current interest rate has been successfully adjusted. The netizen’s advance adjusted interest rate level was LPR + 79 basis points, the adjusted interest rate level was LPR + 0 basis point, and the annual adjusted interest rate was 4.3%.
Another Tianjin citizen said, “I received a text message from the bank early in the morning, and it was quite on time. After waiting for more than a month, it finally arrived, and the interest rate was reduced from 4.2% to about 400 yuan . a month. Calculating the remaining 22 years, I saved more than 10 Wan, thanks to the government.”
There are also netizens from Guangzhou who shared the whole online application process and supplementary information.
The netizen said, “Since the Agricultural Bank of China APP went online on September 25 to apply for a mortgage modification function, I quickly uploaded my personal real estate information. It showed that it was under review until October 24. During this period, I pay attention to it many times, and I was worried. On the 20th, the Agricultural Bank of China credit Once the center staff called us using their mobile phone number to say that they were missing a photo of the back of their card ID. After the backend was completed, the modification was finally successful as shown in the announcement on October 25. From now on, we can save about 300 yuan per month for buying ribs. Extra food. Thanks to the country. “It is reported that this Guangzhou citizen’s mortgage interest rate has been adjusted from 5.1% to 4.3%.
The latest data shows that more than 22 trillion yuan in existing mortgage interest rates have been reduced, benefiting about 50 million households and 150 million people. The average interest rate has decreased by 0.73 percentage points. In total, borrowers’ interest expenses were reduced by 160 billion yuan per year, and the average annual reduction in mortgage loan interest rates has been 160 billion yuan.3200 yuan.
“Currently, the vast majority of borrowers have enjoyed the benefits as soon as possible.” At the third quarter financial statistics conference held by the People’s Bank of China, Zou Lan, director of the Monetary Policy Department of the People’s Bank of China, said, “For other borrowers who still need to provide the major banks will also complete the adjustment within month if the certification materials and banks have confirmed the situation.”
Disclaimer: Securities Times endeavors to provide true and accurate information. The content mentioned in the article is for information only and does not constitute substantive investment advice. Any actions based on this are at your own risk. yourself
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