China to cut mortgage interest rates, home down-payment ratio to boost demand

By Thomson Reuters May 17, 2024 | 12:49 AM

BEIJING (Reuters) – China will cut interest rates of mortgage loans and down-payment ratios for homebuyers to boost lacklustre property demand, according to three statements released by its central bank on Friday.

China will abolish the floor level of the interest rates for mortgages for the first and second homes at the national level, the central bank said.

Local branches of the central bank can decide the floor of commercial mortgages independently, and financial institutions should properly decide the interest rates based on business operating conditions and client risks, the central bank said.

China will adjust the minimum downpayment ratio for first homebuyers to no less than 15% and for residents’ second home purchase to no less than 25%, according to a separate statement from the bank.

(Reporting by Liangping Gao, Ziyi Tang and Ryan Woo; Editing by Muralikumar Anantharaman)