China‘s top banks don announce plan to cut interest rates on existing mortgages starting from October 25, according to state media on Saturday. This move follow request from Beijing‘s central bank to reduce financial burden on homeowners.
The banks involved, including Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, and China Construction Bank, say they will adjust interest rates to be at least 30 basis points lower than the prime lending rate. Except for second mortgages in major cities like Beijing, Shanghai, and Shenzhen, other qualifying mortgages will see these rate reductions.
This initiative part of broader strategy by Chinese authorities to implement various stimulus measures aimed at revitalizing an economy struggling with prolonged crisis in the property sector and persistently low consumer spending. Last month, the People’s Bank of China urge commercial banks to initiate these rate reductions by October 31.
Finance Minister Lan Fo’an expected to reveal more fiscal stimulus plans during a press conference in Beijing on Saturday. Analysts and investors anticipate significant stimulus, possibly up to two trillion yuan ($283 billion), directed at real estate, consumption, and infrastructure.
The banks clarify that these adjustments will be executed uniformly, and customers no need to submit applications for them. This move come as part of a series of interest rate cuts and relaxed regulations concerning home purchases to boost the economy.
