From this month on, who is the better choice between fixed interest rate and LPR?

category:Global
 From this month on, who is the better choice between fixed interest rate and LPR?


Which is more cost-effective for the one or two conversion scheme? The reporter of Beijing News simply calculated an account, taking the loan of 1 million yuan, repayment of equal principal and interest, the original contract period of 30 years, and the current interest rate of 1.1 times (5.39%) as an example, assuming that the LPR quotation in December 2020 dropped to 4.7%, and the monthly supply after linking LPR can be reduced by about 62 yuan.

In this regard, experts believe that for users, the fixed interest rate is fixed for a long time, and they cannot enjoy the dividend of interest rate downward, but they can also avoid the cost increase when the interest rate is upward.

Focus on 1

Who can re sign the mortgage rate?

Three conditions need to be met, excluding provident fund loans

According to the announcement of the central bank, convertible loans should meet several factors at the same time: first, loans that have been issued before January 1, 2020, or have signed contracts but have not been issued; second, the reference is the pricing of the benchmark interest rate of loans; third, the floating interest rate.

It should be noted that the individual housing loan of provident fund is not included. If it is a mixed loan of commercial loan and provident fund, only the part of commercial loan is transferred, and the part of provident fund loan is still executed according to the original contract.

There are two options for the eligible mortgage group: fixed interest rate or adjusted with LPR. In other words, the pricing of the original contract based on the benchmark interest rate of the central bank can be converted into fixed interest rate or LPR. Among them, if we choose to link LPR, the future mortgage rate will fluctuate up and down according to the quotation of LPR rate.

In principle, the conversion will be completed before August 31, 2020, starting from March 1, 2020. For loans with joint borrowers, changes in pricing benchmark need to be jointly confirmed. The borrower has only one option and cannot convert again after conversion.

Focus on 2

If you choose LPR, the monthly repayment will change?

The shortest cycle can be one year, calculated according to the LPR quotation of the previous month

In fact, this is an important step in the reform of interest rate liberalization. LPR is the loan interest rate quoted by 18 representative quotation banks to the banks best customers on the basis of an interest rate given by the central bank. Compared with the benchmark lending rate, LPR has a higher degree of marketization, which can better reflect the changes of market supply and demand.

LPR will quote once a month on the 20th of each month, but after choosing to link LPR, the repayment amount will not change every month. According to the regulations of the central bank, both the borrower and the borrower can re agree on the pricing cycle and the pricing date, with the minimum repricing cycle of one year. Assume that the date of user loan issuance is November 1, 2019, the pricing cycle is one year, and the repricing date is November 1, 2020 after one year extension. At the time of this conversion, it is still possible to choose November 1 as the repricing day or January 1 every year, which is currently the choice of most commercial personal housing loans.

LPR is divided into 1-year period and 5-year period or more. Since the term of personal housing loan is more than 5 years, users only need to pay attention to the LPR quotation of more than 5-year period one month before the repricing date after selection, which determines the monthly supply of the next year.

Focus on 3

How different are the two schemes?

Choose to link LPR and face interest rate fluctuation in the future

Choose fixed interest rate, that is to say, the interest rate level of housing loan will not change in the remaining term of the contract. The reporter consults many banks to understand that in order to smooth the transition, the conversion will continue the previous interest rate level. Assuming that the user originally enjoyed a 10% discount, the interest rate is: the benchmark interest rate is 4.9% u00d7 0.9 = 4.41%, and the new contract can also be negotiated at 4.41%.

If we choose to link LPR, we will face interest rate fluctuation in the future. According to the bank, the interest rate remains unchanged at the time of conversion, which is the calculation logic behind the change. Take the existing loan interest rate of 4.41% as an example. The interest rate previously obtained by users depends on whether the benchmark interest rate of the central bank has changed. After conversion, it depends on LPR quotation, and the calculation logic is changed to LPR + (-) fixed point difference. The fixed point difference in this example is 0.39%, which is based on the 4.8% - 4.41% current interest rate of LPR quoted by the central bank in December 2019.

No matter the LPR will rise or fall in the future, the users interest rate will be lpr-0.39%. If the current interest rate is higher than 4.8% of the LPR quotation in December 2019, add more points.

Focus on 4

For every 5 BPS of LPR adjustment, the impact on the monthly supply of million loans is about 30 yuan

The reporter calculated an account. If the user loans 1 million yuan and repays the same amount of principal and interest, the original contract period is 30 years, and the remaining 20 years, the executive interest rate rises by 10%, that is, the interest rate is 4.9% u00d7 (1 + 10%) = 5.39%, and the monthly supply is 5609.07 yuan.

The fixed point difference is 0.59% (5.39% - 4.8% of LPR quotation in December 2019). As the current interest rate is higher than LPR in December 2019, the implemented interest rate will be adjusted to LPR + 0.59%. Assuming that the price of LPR will be reduced to 4.7% in December 2020, and the users interest rate will be 4.7% + 0.59% = 5.29%, the adjusted monthly supply will be 5546.84 yuan, about 62 yuan less than now.

In addition, the original contract period is 30 years, the remaining 25 years, and the execution interest rate is 10% of the benchmark interest rate. The housing loan interest rate is 4.9% u00d7 0.9 = 4.41%. Because the current interest rate is lower than the LPR in December 2019, the execution interest rate will be adjusted to lpr-0.39%. After adjustment, the monthly supply is 4954.59 yuan, about 58.93 yuan less than now.

What is the impact of LPR changes on monthly supply? Zhang Dawei, chief analyst of Zhongyuan Real estate, said that whether the current interest rate is a 7-fold discount, a 9-fold discount or a 1.1-fold rise, at the time of conversion, banks will continue the previous interest rate through LPR plus and minus points. After that, we should pay attention to the LPR quotation one month before the repricing date. Every 5 basis points of LPR adjustment will affect the monthly supply of million loans by about 30 yuan.

The reporter noted that since the reform of LPRs new formation mechanism in August 2019, it has offered seven times, among which there have been two price cuts for LPR over five-year period corresponding to most housing loan terms, one in November last year and one in February this year, all of which have declined by five basis points.

Focus on 5

Is LPR price reduction the future trend?

Expert: the LPR rate is about to decline, but the extent of decline remains to be observed

In the medium and long term, many insiders believe that the LPR plus and minus point plan has a greater opportunity to enjoy interest rate dividends.

For users, the fixed interest rate is fixed for a long time, and they cant enjoy the dividend of interest rate downward, but they can also avoid cost rise when the interest rate is upward, said Yuan Chengjian, vice president of Zhuge Zhaofang. With LPR as the pricing benchmark plus point, users can enjoy the reduction of repayment amount brought by the downward interest rate, but also the increase of repayment amount when the upward interest rate.

(function () {(window.slotbydup=window.slotbydup||[]).Push ({id: u5811557, container: SSP 5811557, async:true});}) () (); because LPR is not only related to housing loan interest rate, but also the anchor for banks to lend to enterprises, at this stage, it is necessary to reduce the cost of entity financing, so the LPR trend is downward. In terms of the current interest rate market environment, the rate of LPR will probably go down. The option of choosing LPR as the pricing benchmark plus point may be a more stable and mainstream option. Yuan Chengjian said. However, it remains to be seen how fast and how much LPR will decrease in the future. The central bank stressed in its latest report on the implementation of monetary policy that we should adhere to the positioning that houses are used for living, not for speculation, and speed up the establishment of a long-term management mechanism for real estate finance in accordance with the basic principle of implementing policies for the city, rather than using real estate as a short-term means of stimulating the economy. Industry insiders remind that LPR will not always fall or rise, and its decline may be limited. The bank also said that it would not guarantee the price of LPR to customers, and whether the price of LPR would be reduced all the time or whether the customers would choose their own solution. Source: new Beijing News Author: Cheng WeiMiao, editor in charge: Xu Meng, nn7485

As LPR is not only related to the interest rate of housing loan, but also the anchor for banks to provide loans to enterprises. At this stage, it is necessary to reduce the cost of entity financing, so the trend of LPR is downward. In terms of the current interest rate market environment, the rate of LPR will probably go down. The option of choosing LPR as the pricing benchmark plus point may be a more stable and mainstream option. Yuan Chengjian said.

However, it remains to be seen how fast and how much LPR will decrease in the future. The central bank stressed in its latest report on the implementation of monetary policy that we should adhere to the positioning that houses are used for living, not for speculation, and speed up the establishment of a long-term management mechanism for real estate finance in accordance with the basic principle of implementing policies for the city, rather than using real estate as a short-term means of stimulating the economy. Industry insiders remind that LPR will not always fall or rise, and its decline may be limited. The bank also said that it would not guarantee the price of LPR to customers, and whether the price of LPR would be reduced all the time or whether the customers would choose their own solution.