Just now (month and day), the latest Loan Prime Rate (LPR) was released: both the 1-year and 5-year and above LPRs have dropped by 10 basis points!

Today, the People's Bank of China authorized the National Interbank Funding Center to announce that the Loan Prime Rate (LPR) for the loan market on the date is as follows: the 1-year LPR is 3.45%, and the LPR for 5 years and above is 4.20%. The above rates are valid until the next release. This marks the third decline this year and the largest drop so far.

The People's Bank of China has authorized the National Interbank Funding Center to announce that the Loan Prime Rate (LPR) as of the date is: 1-year at 3.45%, and over 5-year at 4.20%. The decrease helps to reduce financing costs, support the recovery of credit demand, and further enhance the growth momentum of consumption and investment.

Currently, the open market 7-day reverse repo operation rate has become the primary policy rate of the People's Bank of China. The People's Bank of China announced on a certain date that it would reduce the 7-day reverse repo operation rate to 2.5%, a decrease of 25 basis points from the previous rate, guiding the adjustment this time.

After this reduction, residents' mortgage interest expenses will significantly decrease. The reduction will greatly alleviate the interest burden on mortgage borrowers and effectively promote consumption. Since the beginning of this year, the cumulative decrease in the above-year term has been several basis points, which is a significant benefit for both new and existing mortgages.

For those about to take out a mortgage to buy a house, the interest cost is lower. For existing mortgage borrowers, the reduction of 0.13 percentage points since the beginning of this year, combined with the average reduction of about 0.14 percentage points in the interest rates of existing mortgages adjusted in bulk by various commercial banks on the 25th of this month, the reduction in mortgage rates this year may exceed 0.27 percentage points.

It is noteworthy that, due to the mortgage pricing rule which determines the new interest rate level for the re-pricing cycle based on the latest rates on the re-pricing date, the reduction of existing mortgage rates generally needs to be phased in. For example, a borrower with an existing mortgage in Beijing, whose re-pricing date is set for every month, currently has a mortgage rate of .% (LPR as of month, year + ), the reduction of their mortgage rate can be implemented in two steps:

Step one, on the specified date, commercial banks will adjust the mortgage interest rate spread above LPR to -, resulting in a mortgage interest rate of .% (-), with an adjustment range of . percentage points (.%-.%).

Step 2, on the date, the mortgage interest rate is recalculated according to the latest issue. If the above-year rate announced in the month is .%, the mortgage interest rate will be adjusted to .% (-), with an adjustment range of . percentage points (.% - .%).

After the two adjustments, the annual mortgage interest rate has decreased by a total of . percentage points. Based on a loan principal of 1 million, with a repayment method of equal monthly installments over 30 years, the total mortgage interest has been reduced by more than 100,000 yuan, and the monthly payment has been reduced by more than 100 yuan.

Decline, conducive to further reduce the cost of social financing. Both the one-year and above-five-year maturity varieties have seen a significant drop of 10 basis points in their quotes. It is expected that this will lead to a decrease in loan rates for enterprises and residents, helping to stabilize and reduce the cost of social financing, expand the overall demand of the macro economy, support a reasonable rise in prices, and drive stable growth in the real economy.