Chinese Banks Lower Mortgage Rates to Ease Burden on Borrowers

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Potential home buyers browse a housing project in Taiyuan, Shanxi province, on Sept. 23, 2024.

China’s major state-owned commercial banks lowered interest rates on existing mortgages on Friday, giving borrowers a rate cut of 0.5 percentage points on average and saving households a total of 150 billion yuan ($19.3 billion) a year.

This adjustment, mandated by the People’s Bank of China (PBOC), is to bring existing mortgage rates in line with market conditions. While smaller banks may implement the change slightly later, the process is expected to be completed by October 31.

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China's major state-owned banks reduced existing mortgage interest rates by 0.5 percentage points, saving households 150 billion yuan annually.
The People's Bank of China mandates this adjustment to align rates with market conditions and improve disposable income for 150 million residents.
Starting Nov. 1, borrowers can renegotiate mortgage rates if existing rates differ significantly from new ones, aiming for more market-driven flexibility.

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