Reported 8 months ago
Various regions in mainland China have been gradually eliminating the lower limit on mortgage interest rates, with interest rates for first home or second home loans mostly dropping to around 3%. However, the interest rates for existing mortgages held by customers who purchased prior to the new policy still remain above 4%, leading some mortgage holders to consider early repayment. Calls for reducing interest rates on existing mortgages are growing louder, as the gap between the old and new loan rates widens. Many banks in Beijing have reported a high number of customers seeking early repayment, with appointments for such services needing to be made at least a month in advance. The reasons behind the trend of early repayment are not only due to the disparity between the existing and new mortgage rates, but also because existing mortgage rates are generally higher than the investment returns on resident investments. Experts believe that lowering interest rates on existing mortgages could lead to a short-term reduction in bank interest income but could have a positive impact on banks in the long run by stimulating the real estate market and increasing loan demand.
Source: YAHOO