Following the adjustment of the personal housing loan ceiling, the banks are following up quickly。
According to fia, on 30 august, construction banks have begun to implement policies. The builder indicated that the client could apply to the bank for an extension of the loan period and that the bank would make a comprehensive assessment based on the specific reasons for the request, the source of repayment and the subsequent repayment arrangements, which would reasonably determine the specific period of time that could be extended. According to the bank's current performance, the extension period is not more than half the duration of the original loan, and the combined duration of the original loan and the extension period is not more than 40 years。
For example, a client whose original loan term is 30 years may apply for an extension of up to 10 years, or up to 5 years if the original loan term is 10 years. According to the construction services, the updated regulations had been implemented from the date of the issuance of the policy (28 august 2026)。
In consultation with business banks, agricultural banks and transport banks, journalists indicated that specific policies regarding the possibility of applying for an extension of the duration of individual mortgages were not available. According to the client service of the bank of china, the bank will strictly implement the relevant provisions of the personal housing loan management scheme (pilot) issued on 28 august by the general directorate of financial supervision, and may consult the lending institutions in case of policy doubts。
In addition, there are multiple participants, such as journalists, chinese and chinese, who have indicated that the current back-office system is not available for stock loans. The duration of the policy could be extended to 40 years, but local lending institutions would still need to be consulted。
On 28 august, the people's bank of china and the general directorate of state financial supervision issued a joint opinion on reforming and improving the management of real estate credit and promoting the acceleration of the construction of a new model of real estate development (hereinafter referred to as " the opinion " ). The proposal focused on the need for credit throughout the life cycle for real estate development, construction, sale and operation. It identified the types of loans in the subdivisions of commercial housing, secure housing, rental housing and commercial real estate. It strengthened the connectivity of the various types of loans. It integrated the core elements of loan targeting, duration, use and mortgage rates, and built a comprehensive and structured system of real estate credit products。
The daily economy news reporter noted that, in order to better meet the reasonable demand for credit for real estate, the opinion focused on optimizing the two core systems of development loans and individual housing loans, such as the establishment of a development loan hosting banking system to enhance financial services for the transformation of the real estate sector; strengthening the interface between individual housing loans and development loans; and extending the duration of individual housing loans from a maximum of 30 to a maximum of 40 years。
“the establishment of the last 30-year period implies a linear increase in the income of the population and an expected stabilization of the income of the population, in which the equivalent repayment pattern is reasonable. In the last five years, however, it has been shown that the growth of household income is non-linear and phased, with short-term repayment pressures, while medium- and long-term repayment capacity tends to improve gradually. Based on new changes in income structure and repayment capacity, it is imperative to optimize the term of the mortgage.” the vice-president of the shanghai institute for eternal property made a drastic leap forward, indicating that the most immediate effect of the extension of the term to 40 years would be to reduce monthly repayment rates and significantly ease the pressure on the first months of house purchases. At the same time, conditions have been created for innovative repayments by banks, such as exploring flexible arrangements such as only interest repayments over the first five years, subsequent re-implementation, etc. In line with the current downward revision of the down payment rate and the low interest rate on housing, a “triple low” pattern of “low down payment, low interest rates and low monthly supply” has provided a strong boost to the release of housing consumption and has contributed positively to the market for subsequent home sales。
The sharp leap was calculated at the principal of a loan of 1 million yuan, with an annual interest rate of 3 per cent, with an equivalent principal repayment rate of 4216. 04 yuan per month for a period of 30 years, whereas it was extended to the later of 40 years to 3581. 02 yuan, a direct reduction of 635. 02 yuan per month, or about 15 per cent. This means that households buying a home can save about $762 per year in cash-flow expenses, and cumulatively release almost $38,000 in repayment pressure over the previous five years, which is a real “down” for groups that are currently characterized by a gradual increase in income. Of course, the increase in total interest would be commensurate with the lengthening of the term, but the logic of “time for space” would give home buyers more room for choice between short-term repayment capacity and long-term debt arrangements. (note: the total interest over the 40-year period increased by approximately $200,000 over the 30-year period, using equivalent principal repayments at a principal loan of $1 million and an annual interest rate of 3 per cent
In addition, the opinion, in conjunction with the reform of the commercial housing sales system, focuses on the reform of the credit system at the construction and marketing stages of development, strengthening the management of financial closures, earmarking and better safeguarding the legitimate rights and interests of home buyers。
Industry experts believe that the restructuring of the credit system will have far-reaching implications for the real estate industry and individuals. “the opinion will have many positive implications and profound implications for the development of the real estate market and accelerate the development of new models of real estate development while protecting the legitimate rights and interests of buyers.” the chief economist of the union, tung shi-chul, said to the daily economic news reporter。
In particular, the greatest value for home buyers lies in the transformation of “back-to-back” from an administrative commitment to institutional by-laws, the mechanism of “take-home, re-pay-back” will eliminate the risk of a “two-hour loan” in the past, and the extension of the credit period to 40 years will significantly reduce monthly pressure, while increased flexibility in debt restructuring will provide valuable buffer space for families experiencing stage difficulties, and the financial security and legal rights of home buyers will be guaranteed in an unprecedented manner。
For the real estate sector, the development loan hosting banking system and the fully closed management of funds have forced housing companies to move away from the high turnover model, which relies on pre-sale refunds to the development value of the project itself for financing, while the duration of the loan matches the construction cycle and the first repayment arrangement, when completed, provides financial support for the ongoing housing sales reform introduced by the “fifty-five” plan and the overall development behaviour of the industry will be more regular, transparent and robust。
For the financial system, the establishment of clear and counter-cyclical mechanisms for macroprudential management tools has allowed central banks to adjust policy parameters flexibly to market changes and has enhanced the proactive control of real estate financial risks, while developing loans and individual housing loans the organic link between the timing and the flow of funds, and the creation of a virtuous circle of “bank lending, housing stock cover, residents buy it,” will essentially contribute to the virtuous circle and harmonious development of finance and real estate and lay the institutional foundation for the long-term healthy functioning of the industry。
