Two departments: Lowering the interest rate on existing first-home mortgages.

The People's Bank of China Shanghai Headquarters, branches of provinces, autonomous regions, municipalities directly under the Central Government, and separately listed cities; various regulatory bureaus of the China Banking and Insurance Regulatory Commission; state-owned commercial banks, China Postal Savings Bank, and joint-stock commercial banks:

In order to implement the decisions and arrangements of the Party Central Committee and the State Council, adhere to the positioning that houses are for living, not for speculation, guide the orderly adjustment and optimization of asset-liability of commercial individual housing loans, regulate the order of the housing credit market, the following matters concerning the reduction of interest rates on existing first-home commercial individual housing loans are hereby notified:

1. Existing first-home commercial individual housing loans refer to first-home commercial individual housing loans that have been issued by financial institutions before August 31, 2023, and first-home commercial individual housing loans that have been signed but not yet issued, or other existing commercial individual housing loans that meet the first-home housing standards in the city where the borrower's actual housing situation is located.

2. Starting from September 25, 2023, borrowers of existing first-home commercial individual housing loans may apply to the lending financial institutions for the replacement of existing first-home commercial individual housing loans with newly issued loans. The interest rate level of the newly issued loans shall be determined through independent negotiation between the financial institution and the borrower, but the spread over the loan market quoted interest rate (LPR) shall not be lower than the lower limit of the interest rate policy for first-home commercial individual housing loans in the city where the loan was originally issued. The newly issued loans can only be used to repay existing first-home commercial individual housing loans and will still be included in the management of commercial individual housing loans.

3. Starting from September 25, 2023, borrowers of existing first-home commercial individual housing loans may also apply to the lending financial institutions to negotiate the change of the contractually agreed interest rate level. The interest rate level of the changed loan contract shall comply with the provisions of Article 2 of this notice.

4. Financial institutions shall strictly implement relevant regulatory requirements, conduct thorough and substantive audits of the purpose of borrowers' applications for operating loans and personal consumption loans, and provide clear risk prompts. Intermediary institutions that assist borrowers in illegally replacing existing commercial individual housing loans with operating loans and personal consumption loans shall not be allowed to cooperate, and internal personnel involved in such activities shall be dealt with seriously.

5. Financial institutions should promptly formulate specific operational rules, do a good job in organization and implementation, improve service levels, respond to borrowers' applications in a timely manner, adopt convenient measures as much as possible, reduce borrowers' operating costs, and ensure the implementation of the requirements of this notice.

6. The People's Bank of China and the branches of the China Banking and Insurance Regulatory Commission should immediately forward this notice to domestic legal person financial institutions within their jurisdiction, urge them to implement it, and effectively maintain market order.

This notice shall be implemented from September 25, 2023. Inconsistent provisions prior to this notice shall be subject to this notice.