China’s Provident Funds Cut Home Loan Rates in Response to Central Bank Directive

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Provident funds for major cities around China have cut their home loan rates in response to a push from the Chinese central bank.

On 1 October the People’s Bank of China (PBOC) announced that starting from 1 October it would reduce the rate for first home loans made by provident funds by 0.15 percentage points. The move brought the rate for first home loans of five years and below down to 2.6%, and the rate for home loans of more than five years to 3.1%.

Rates for second home loans made by provident funds remained unchanged, at a minimum of 3.025% for five years and below and 3.575% for more than five years.

Since PBOC’s decision cities around China have followed suit, announcing reductions to home loan rates for their provident funds in line with its directive.

These cities include Beijing, Hangzhou, Wuxi, Zhengzhou, Nanning, Shijiazhuang, Tianshui, Jilin, Suzhou, Xiangyang, Yichang, Jinan, Zibo, Rizhao, Weifang and Dongguan.