China's central bank said Sunday it would tell banks to lower mortgage rates for existing home loans before Oct. 31, as part of sweeping policies to support the country's beleaguered property market as the economy slows.
Commercial banks should, in batches, reduce interest rates on existing mortgages to no less than 30 basis points (bps) below the Loan Prime Rate (LPR), the central bank's benchmark rate for mortgages, according to a statement released by the People's Bank of China (PBOC).
It is expected to cut existing mortgage rates by about 50 bps on average.
Across China, a slew of policies including reductions in down-payment ratios and mortgage rates have been introduced this year to support China's crisis-hit property market.
But the stimulus measures have struggled to boost sales or increase liquidity in a market shunned by buyers that has remained a big drag on broader economic growth.
Adding to such efforts, Guangzhou city announced Sunday the lifting of all restrictions on home purchases, while Shanghai and Shenzhen said they would ease restrictions on housing purchases by non-local buyers and lower the minimum downpayment ratio for first home buyers to no less than 15%.
Reuters reported Friday that Shanghai and Shenzhen were planning to lift key remaining restrictions to attract potential buyers.
The announcements Sunday come after China unveiled its biggest stimulus plan Tuesday since the COVID pandemic to pull the economy out of its deflationary funk.
