Existing mortgage rates lowered, saving borrowers $21 billion

Interest rates for the majority of existing housing loans in China were reduced on Friday, with the rest to be reduced by some small and medium-sized banks by the end of this month, a move that will save mortgagers about 150 billion yuan ($21.05 billion) in total, commercial banks and experts said.

Friday's move has reduced the average interest rate on existing housing loans by around 0.5 percentage points, benefiting 50 million households and 150 million individuals, effectively boosting market confidence, supporting consumption and investment, and helping stabilize the real estate market, they said.

High interest rates on existing housing loans have been a pain point in the economy, especially against the backdrop of slowing economic growth and sluggish income for residents. On Sept 24, People's Bank of China Governor Pan Gongsheng announced the policies to slash existing mortgage rates.

With the decrease in existing housing loan rates, experts said that concerns among home buyers about the widening gap between interest rates on new and old housing loans have been alleviated, aiding in releasing pent-up demand for home purchases.

Market analysts said there have emerged early signs of stabilization in the real estate market, with a notable increase in property viewings and transactions in first-tier cities like Beijing recently. According to a major bank, early repayments on housing loans have decreased by 20 percent since October compared to September.