The Ministry of Finance and three other departments have released an interest discount policy for residents’ home purchase loans, which can reduce the interest rate by up to nearly 50,000 yuan.

Reporter Wang Wenzheng

The Ministry of Finance, the People's Bank of China, and the State Administration of Financial Supervision issued a notice on September 29, clarifying that starting from October 1, 2026, the interest discount policy for residential home purchase loans will be implemented nationwide, and an annual discount of 1 percentage point will be provided to eligible commercial personal housing loans. The policy implementation period is tentatively scheduled for one year.

Which groups will benefit from the interest discount policy? Relevant officials from the Ministry of Finance, the People's Bank of China, and the State Administration of Financial Supervision said that the policy focuses on the immediate needs of the first home, and focuses on supporting ordinary families to purchase new small and medium-sized, lower-priced housing. Specifically, limited fiscal funds are mainly used to benefit more groups in urgent need, and interest discount support is provided to households that meet the following conditions:

The first is to use newly issued commercial personal housing loans to purchase a first home, excluding replacement of existing loans. Among them, the identification of "first-time housing" is implemented in accordance with current policies, including both new homes and second-hand homes. Second, the building area of ​​the purchased house does not exceed 120 square meters. Third, the price of the house purchased does not exceed 1.5 million yuan.

According to reports, the above-mentioned conditions are mainly set to support the basic housing purchase needs of the hard-to-need groups. Taking into account the different income, housing area, price level and other conditions of residents in different cities, the central level coordinates to benefit people's livelihood, ensure basic needs, wide coverage, promote fairness and financial possibilities, and strive to balance it nationwide. For relevant groups who use loans to purchase affordable housing and provident fund loans to purchase houses, the state has relevant policy support, and this time they will not enjoy policy support at the same time.

"The central government's policy of discounting interest rates for residents' home purchase loans is an exploration of ways to protect and improve people's livelihood in the housing field. By defining the total price of the house, the area of ​​the house, and the types of loans, it will benefit the target group as accurately as possible and help families with relatively low incomes who are preparing to buy the most ordinary houses to reduce their monthly payments." said the person in charge.

From the perspective of policy strength, an interest discount of 1 percentage point can reduce the interest cost of residents' loan purchases.

According to reports, eligible households can enjoy discounted loans of up to 1 million yuan, and the financial department will provide an annual discount of 1 percentage point. According to the current commercial personal housing loan interest rate for first homes, it is equivalent to a discount of 1/3 of the interest rate, and the discount period can be up to 5 years.

For example, for a long-term commercial personal housing loan of 1 million yuan, considering that most mortgages pay interest and repayment on a monthly basis, and the loan balance decreases month by month, the interest discount policy can help the borrower reduce the cumulative interest payment by up to nearly 50,000 yuan. The specific interest discount amount enjoyed by households varies depending on the loan size, term, repayment method, etc.

From the perspective of fund guarantee, fiscal interest discount funds will be fully guaranteed to ensure that "all the subsidies are available." The policy starting date is October 1 this year, and the policy implementation period is tentatively scheduled for one year. During this period, eligible households can enjoy fiscal interest discount support. There is no upper limit on the total scale of funds during implementation. The budget has been fully arranged and settlements are based on facts.

The implementation of the policy will also achieve full coverage of handling banks to facilitate "nearby application" for loans. According to reports, taking into account the wide range of commercial personal housing loan business points, in order to facilitate the residents' families to borrow and enjoy nearby, all banks that carry out commercial personal housing loan business can handle the interest discount business for residents' home purchase loans in accordance with regulations. In the process of enjoying the interest discount, the home buyer applies for a loan at the bank according to the normal credit process. When signing the loan contract, he only needs to authorize the bank to handle the interest discount on his behalf. The bank automatically identifies eligible borrowers and automatically calculates and deducts the corresponding interest discount amount when collecting monthly interest.

The above-mentioned person in charge said that for the first time, the central government has subsidized interest rates on commercial personal housing loans for some groups with relatively low incomes, further opening up room for policy efforts on the demand side: by strengthening fiscal and financial coordination, giving full play to the role of fiscal guidance, financial amplification, and market operation mechanisms, we can better support and release the rigid housing needs of urban and rural residents, and truly help new citizens such as migrant workers, young people such as newly employed college students, and urban working-class families and other families who just need to buy houses, reduce costs and burdens, and help more people live in a place of residence.

"In the next step, we will closely track the progress of policy implementation, strive to make the operation as simple as possible, reduce the number of people having to do errands, and promote the full release of policy effects so that the people can benefit as soon as possible." The person in charge said.