How much money can you save on interest on a 1 million yuan mortgage in China?

Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, Construction Bank and other banks have successively issued announcements that starting from October 25, the interest rates of existing personal mortgages will be adjusted in batches. Except for the second mortgage in Beijing, Shanghai, Shenzhen and other regions, the interest rates of other eligible mortgages will be adjusted to the loan market benchmark rate LPR-30BP (minus 0.3% on the basis of the loan market benchmark rate).

Many banks have made it clear that the adjustment of the interest rate of existing mortgages will be uniformly adjusted in batches by the banks, and customers do not need to apply.

If the interest rate of the borrower’s existing mortgage is already lower than the loan market benchmark rate LPR-30BP, it will not be adjusted. For fixed-rate existing mortgages, it is necessary to convert them into floating rates of the loan market benchmark rate LPR plus or minus points, and then the bank will make adjustments directly. Customers with overdue mortgages are not included in this batch adjustment.

According to statistics, the reduction in the interest rate of existing mortgages is expected to benefit 50 million households and 150 million people, reducing household interest expenses by about 150 billion yuan per year on average.

How much money can be saved in a month after this interest rate adjustment?

If the mortgage is priced at a floating rate and the current interest rate is higher than LPR-30BP, the mortgage interest rate will be adjusted to LPR-30BP (except for second home loans in Beijing, Shanghai, Shenzhen and other regions).

Assume that in a second-tier city, the current mortgage interest rate of home buyers is the loan market quotation rate LPR without adding points, that is, 3.85%. The mortgage interest rate after adjustment is LPR-30BP, and the interest rate after repricing is 3.85%-0.3%, that is, 3.55%, which is 0.3% lower than before the adjustment. Taking a mortgage with a loan amount of 1 million yuan, a term of 30 years, and equal principal and interest as an example, the monthly expenditure can be saved by about 170 yuan after the adjustment, and the total interest saving is about 61,000 yuan.

Assume that in a first-tier city, the current mortgage interest rate of home buyers is the loan market quotation rate LPR+55BP (the first mortgage interest rate policy when the loan is issued), that is, 4.4%. The mortgage interest rate after adjustment is LPR-30BP, and the interest rate after repricing is 3.85%-0.3%, that is, 3.55%, which is 0.85% lower than before the adjustment. Taking a mortgage with a loan amount of 1 million yuan, a term of 25 years, and equal principal and interest as an example, after the adjustment, the monthly expenditure can be saved by about 469 yuan, and the total interest savings are about 140,600 yuan.

How to adjust fixed and benchmark interest rate pricing?

For loans currently priced at fixed or benchmark interest rates, you need to actively apply for a conversion to a floating rate before adjusting the existing interest rate.

For example, the current first mortgage loan is priced at a fixed rate of 4%. On October 15, you apply for a conversion to a floating rate. Since the LPR for more than 5 years at the time of application for conversion is 3.85%, the interest rate after conversion is LPR+15BP. The batch adjustment of interest rates on October 25 will be uniformly adjusted to LPR-30BP.

How to adjust the interest rate of the existing second mortgage loan?

Except for Beijing, Shanghai and Shenzhen, the interest rate adjustment of existing mortgage loans is different due to the different lower limits of the loan interest rates for the first and second mortgages. In other parts of the country, whether it is the first or second mortgage, the interest rate of existing mortgage loans will be adjusted to the loan market quotation rate LPR-30BP.

If the loan is in Beijing, Shanghai, Shenzhen and other regions and meets the housing loan standards for “second to first”, you can contact the loan processing bank to apply for “second to first”, and you can enjoy a more favorable first mortgage loan interest rate after approval. If the loan is in the above three places, but does not meet the “second set to first set” conditions, according to the current second set loan policy lower limit, the adjusted interest rate value is: LPR-25BP outside the Fifth Ring Road of Beijing, LPR-5BP within the Fifth Ring Road of Beijing; LPR-25BP in the Lingang New Area of ​​Shanghai Free Trade Zone and Jiading, Qingpu, Songjiang, Fengxian, Baoshan, and Jinshan Districts, LPR-5BP in other areas; LPR-5BP in the whole of Shenzhen.

Can the interest rate of provident fund loans and provident fund combination loans be lowered?

This adjustment of the interest rate of existing mortgages does not involve provident fund loans, but the commercial personal housing loan part of the provident fund combination loan will also be adjusted.

Will the interest rate of commercial mortgages also be adjusted this time?

This adjustment of the interest rate of existing mortgages is only for commercial personal housing loans. Commercial housing, including commercial and residential housing and commercial shops, are not within the scope of this adjustment.