China News Service, Beijing, September 30 (Reporter Pang Wuque) If you take a loan to buy a house, the state will subsidize interest rates. Recently, the Ministry of Finance, the People's Bank of China, and the State Administration of Financial Supervision jointly issued a new policy, clarifying that starting from October 1, the interest discount policy for residents' home purchase loans will be implemented nationwide, and the policy implementation period is tentatively scheduled for one year. During this period, eligible residents can enjoy a 1 percentage point discount on their mortgage loans. This is the first time that the central government has subsidized interest rates on commercial personal housing loans.
The intention of the policy is clear: to help families with relatively low incomes who are preparing to buy the most ordinary houses to "reduce their monthly payments." Industry experts believe that this move sends dual signals to stabilize the property market and protect people's livelihood.
The policy delineates three thresholds to target groups in urgent need. One is the first home. You can use newly issued commercial personal housing loans to purchase your first home, new or second-hand homes, but replacement of existing home loans is not within the scope. Second, the area does not exceed 120 square meters. Third, the total price does not exceed 1.5 million yuan (RMB, the same below).
Relevant persons in charge of the three departments explained that setting these conditions is to "focus on supporting the basic housing purchase needs of groups in urgent need"; the target groups include new citizens such as migrant workers in cities, young people such as newly employed college students, and families in urban working-class families who are in urgent need of housing purchase.
This time, the financial department will provide an annual discount of 1 percentage point based on the loan principal, with a maximum period of 5 years, and the upper limit of the loan size that can enjoy the discount is 1 million yuan. According to the current first-home loan interest rate level, it is equivalent to a discount of one-third of the interest rate.
According to data from the central bank, the weighted average interest rate of new commercial personal housing loans nationwide in the second quarter of 2026 was 3.06%. After interest discounts, the actual interest rate of eligible first-home loans is about 2.06%, which is about 54 basis points lower than the interest rate of provident fund loans with a maturity of more than 5 years (2.6%).
Wu Jing, director of the Real Estate Research Center of Tsinghua University, did some calculations: a 1 million yuan, 30-year loan with equal principal and interest, after interest discounts, would save about 46,000 yuan in the first five years. Luo Zhiheng, chief economist of Guangdong Securities, said that based on a simple calculation based on a down payment of 500,000 yuan and a loan of 1 million yuan, after interest discounts, the annual interest expense in the first five years will be saved by about 10,000 yuan, which can save more than 800 yuan per month. Wu Jing said that this is a considerable enough subsidy for the target group.
Third- and fourth-tier cities and counties will be the biggest beneficiaries of this policy. According to calculations by the Real Estate Research Center of Tsinghua University, among the 336 cities monitored at prefecture level and above, the average price of second-hand houses in 315 cities in August this year was less than 12,500 yuan per square meter, and the total price of purchasing a 120-square-meter house did not exceed 1.5 million yuan, covering the vast majority of third- and fourth-tier cities. Even in first- and second-tier cities where the total price of houses is relatively high, support can be provided to some first-home buyers.
A CITIC Securities research report also pointed out that the houses that comply with the regulations this time are mainly housing in second-tier and lower-tier cities, and the loan interest discount policy is expected to have a significant promotion effect on real estate transactions in lower-tier cities in the fourth quarter.
Wu Jing also pointed out that since the end of last year, the housing market in first-tier cities represented by Shanghai and some second-tier cities represented by Hangzhou has continued to show positive changes, while some third- and fourth-tier cities still face certain difficulties. Increasing demand-side support for third- and fourth-tier cities in a direct way such as interest discounts will help promote the stability of the real estate market on a wider scale.
However, it should also be noted that for cities with population outflows, although interest discounts can reduce the cost of home purchase, it is difficult to change the problem of insufficient purchasing power, and the policy is more of a "support" than a "reversal." For the property market to truly pick up, more conditions will be needed.
The State Council executive meeting held on September 28 proposed to “launch a batch of pragmatic and effective incremental policies” and clearly “study and introduce policies and measures to stabilize the real estate market, promote employment and increase income”. The next day, the mortgage interest discount policy was introduced. The policy signal here is clear: the country has spent real money, and more new policies to stabilize the property market can be expected.
