The interest rate of individual housing loan is an integral part of the loan interest rate system. In the process of reforming and perfecting the formation mechanism of loan market quotation rate (LPR), the pricing benchmark of individual housing loan also needs to be converted from the benchmark interest rate of loan to LPR in order to play a better role in the market. At the same time, the interest rate of individual housing loan is also an important part of the long-term management mechanism of the real estate market and the regional differential housing credit policy. In order to implement the orientation of housing is for living, not for speculation and the long-term management mechanism of the real estate market, ensure the smooth and orderly conversion of pricing benchmarks, maintain the basic stability of the interest rate of personal housing loans, and safeguard the legitimate rights and interests of both borrowers and lenders, the Peoples Bank of China issued a public announcement to clarify the correlation between the adjustment of the interest rate of personal housing loans. Matter.
2. How to price the interest rate of personal housing loan after the reform?
After the reform, the interest rate of newly issued commercial personal housing loans was formed with the LPR of the corresponding period of the last month as the pricing benchmark plus point. Among them, LPR is formed by the quotation of interest rate quotation bank in loan market. The specific incremental value of each loan shall be agreed upon by the lending bank in accordance with the requirements of the national and local housing credit policies, taking into account the loan risk situation, and negotiating with the borrower when issuing the loan. Once the Added-Point value is determined, it will remain unchanged throughout the contract period.
3. How to understand the corresponding period when determining the pricing benchmark?
At present, LPR has one-year and more than five-year varieties. Individual housing loan interest rates for one-year and more than five-year periods have a direct corresponding benchmark. The benchmark of individual housing loan interest rates for one-year and one-to-five-year periods can be chosen by the lending bank independently between the two types of term. After the reference benchmark is determined, the term spread factor can be reflected by adjusting the Added-Point value.
4. What is interest rate revaluation?
Interest rate revaluation refers to that the loan bank determines the new loan interest rate level according to the change of the pricing benchmark according to the calculation method stipulated in the contract. The announcement specifies that the period of interest rate redistribution for individual housing loans can be agreed upon by both parties through consultation, the shortest being one year and the longest being the contract term. Borrowers and lending banks can choose according to their own interest rate risk bearing and management capabilities. Each time the interest rate is re-priced, the pricing benchmark is adjusted to the LPR of the corresponding period of the last month.
5. What impact does it have on households?
The announcement mainly aims at the newly issued interest rate of personal housing loan, and the interest rate of the stock personal housing loan is still implemented according to the original contract. After the conversion of the pricing benchmark, the interest rate of the first new set of personal housing loans issued nationwide shall not be lower than the corresponding term LPR (4.85% according to the LPR above the 5-year period of August 20); the interest rate of the two sets of personal housing loans shall not be lower than the corresponding term LPR plus 60 basis points (5.45% according to the LPR above the 5-year period of August 20), which is similar to the current individual housing in China. The real minimum interest rate of loans is basically the same. At the same time, the branches of the Peoples Bank of China will guide the provincial market interest rate pricing self-regulation mechanism to determine the local LPR plus point lower limit in time. Compared with before the reform, when households apply for personal housing loans, the interest expenditure is almost unaffected.
6. When will it be implemented?
October 8, 2019 is the conversion day of pricing benchmark. Before that, loan banks need to modify loan contracts, upgrade systems, organize staff training, and take various ways to do a good job of publicity and interpretation for customers to ensure that the transformation process is smooth and orderly. By October 8, 2019, loans that have been granted and signed but have not been granted are still executed in accordance with the original contract.
Source: Responsible Editor of the Peoples Bank of China: Wang Ning_NB12468