China's top financial regulators yesterday ordered a cut to down payments for both first- and second-time homebuyers,
while further cutting interest rates on existing mortgages.
According to a notice issued by the People's Bank of China and the National Administration of Financial Regulation
starting from September 25, borrowers will be able to negotiate a mortgage rate change with banks or a swap for a new loan plan.
The new interest rates will be based on the central bank's current loan prime rate
and shall be no lower than the city's first-home mortgage rate policy where the original loan was issued.
Xinhua reports citing analysts' estimate that the lowering of mortgage rates will benefit about 40 million borrowers.
The policy adjustments also featured lower down payment requirements for home purchases.
The minimum down payment ratio for first-home buyers will be no less than 20 percent
and for second-time buyers no less than 30 percent, both a reduction of 10%.