From February 1, Shenyang Municipal People's Government decided that all commercial banks in Shenyang would lower the lower limit of the personal commercial loan interest rate policy for first-time home buyers in phases based on the dynamic adjustment mechanism of the first home loan interest rate policy issued by the People's Bank of China and China Banking and Insurance Regulatory Commission. After the adjustment, the lower limit of the personal commercial loan interest rate policy for first-time home buyers in Shenyang is the latest loan prime rate (LPR) minus 40 basis points, that is, the interest rate of the first home loan of more than 5 years is 3.9 percent. The person in charge of the business management department of the Shenyang branch of the People's Bank of China introduced that the adjustment will better support the local firm and rational demand for housing in Shenyang.

The current mortgage interest rate policy of the People's Bank of China stipulates that the home commercial loan interest rate is formed by adding or subtracting points from the LPR of the corresponding term in the most recent month as the pricing benchmark. This time, commercial banks in Shenyang unified the lower limit of the first home loan interest rate to LPR minus 40 basis points. Based on the LPR of 4.3 percent over 5 years announced in January, the current lower limit for first mortgage rates is 3.9 percent. If the LPR announced in February is adjusted, the lower limit of the first mortgage rate will be adjusted in the same direction.

The background of this adjustment is January this year, the People's Bank of China and China Banking and Insurance Regulatory Commission issued the first housing loan interest rate policy dynamic adjustment mechanism. This mechanism links the housing loan interest rate policy to the trend of new housing prices and adjusts it dynamically, which is conducive to supporting the city government to scientifically assess the change of local commercial housing sales prices, making full use of the policy toolbox to form a long-term mechanism to support the stable and healthy operation of the real estate market. The person in charge of the business management department of the Shenyang branch of the People's Bank of China said that the adjustment is also in line with the government report of Shenyang Municipal People's Government this year, which clearly put forward the requirements of "implementing all measures to ensure the stable development of the real estate market and promoting the smooth transition of the real estate industry to the new development mode".

The reporter learned from commercial banks on the same day, banks will implement differential pricing policies when granting loans. Whether individuals can enjoy the lower limit standard of mortgage interest rate when handling the first housing loan depends on multiple factors such as personal credit status and repayment ability. At the same time, the policy is implemented for incremental mortgage users, and the interest rate for loans for existing users is implemented in accordance with the terms of the housing loan contract.

It is worth mentioning that in 2022, the LPR over five years experienced three cuts, from 4.65 percent to 4.3 percent, with a total reduction of 35 basis points. Combined with the "dividend" of the lower limit adjustment of the first home loan interest rate, the repayment pressure of the first home loan customers will be greatly reduced.

Reporter Liu Yang