Banks aim to improve early mortgage repayment services

Commercial banks are optimizing their financial services to increase the number of early repayments of mortgages by homebuyers and improve the processing time. The difficulties in early repayments of mortgages have been gradually alleviated, said an official with the China Banking and Insurance Regulatory Commission on Friday.

The willingness of homebuyers to repay their mortgages early has increased recently, and the inefficiency of banks in handling early repayments has caused wide concern.

In order to meet the large demand for the early repayments of mortgages, some banks have formulated special early repayment service plans and procedures, coordinated online and offline service channels, and ensured that the time of repayments can be predicted. Some banks have set up hotlines dedicated to the early repayments of mortgages. Some allowed homebuyers to make early repayment appointments through online channels such as mobile banking to improve service efficiency, the official said.

One of the reasons prompting some homebuyers to repay mortgages early is that the returns on wealth management products are lower than their mortgage rates. In the second half of 2022, the yields on wealth management products continued to decline, even resulting in losses. Therefore, many investors redeemed their WMPs.

In the last two months of 2022, some WMPs experienced net asset value fluctuations due to factors such as the improvement of economic expectations and the rise in bond yields. This demonstrated that the market made its own adjustments accordingly, and overall risks are controllable, said another official with the CBIRC.

The market has now almost become stabilized, and the net asset value of some WMPs has gradually recovered significantly. The prospects for the development of wealth management are still broad in the future, according to the regulator.

The CBIRC will work with relevant departments to continue guiding commercial banks to provide real estate financial services in accordance with contractual agreements, unblocking online channels processing early repayments of mortgages, and accelerating the approval process. At the same time, regulators will keep strengthening the supervision of violations of the use of business loans and the illegal flow of consumer loans into the real estate sector.