In accordance with the overall arrangements of the CPC Central Committee and the State Council, the People s Bank of China has decided to lower the floor rates on commercial individual housing loans to 0.7 times the benchmark lending rates, and the minimum down payment ratio to 20% as of October 27, 2008. The decision has been made in response to the possible impact on China caused by the global financial crisis and with a view to helping boost domestic demand, improving financial service for the purchase of self-use ordinary housing and promoting better quality of life for the people.
1.Financial institutions shall decide, above the lowest level, loan rates and down payment ratios for customers on a differentiated basis, according to whether the borrower is a first-time house buyer, whether the house is purchased for self use, whether the floor space and other conditions of the house meet the standards for ordinary housing and according to risk factors such as the borrower s credit record and repayment ability.
2.Financial institutions can offer loan rates and down payment ratios on preferential terms to customers who borrow to buy their first unit of self-use ordinary housing or their first unit of self-use ordinary housing for improvement purposes. For purchases of not-for-self-use housing and non-ordinary housing, loan rates shall be duly raised.
3.Interest rates on individual housing provident fund loans will be lowered. The rates on individual housing provident fund loans with maturities up to 5 years (inclusive) and with maturities above 5 years will be lowered from the current 4.32% to 4.05% and from the current 4.86% to 4.59% respectively, both by 0.27 percentage points.
4.For purchases of self-use housing in the areas hit by the Wenchuan earthquake, preferential policies on the floor loan rates, minimum down payment ratio and individual housing provident fund loan rates remain unchanged.
