Efforts to narrow interest gap for housing seen paying off

Borrowers who peg to prime readings on Jan 1 able to enjoy major rate cuts

China's implementation of adjustment mechanisms to narrow the gap between the interest rates of existing and newly issued mortgages has triggered a cut of existing home loan interest rates on the first day of 2025, and industry experts suggest there is still downward adjustment room considering the moderately loose monetary policy.

For commercial housing loan borrowers who peg their home loan interest rates to the latest loan prime rate readings — the pricing benchmark — on Jan 1, they may have seen a substantial reduction in mortgage rates nationwide on Wednesday, according to authoritative sources.

"About 80 percent of our customers chose Jan 1 as the loan adjustment date, and many of them can benefit from the decline of interest rates," Xu Tingting, head of a Beijing-based branch of Bank of Nanjing, was quoted by Xinhua News Agency as saying.