Interest rate cuts save at most one car and maybe even less

2022-07-27 0 By

In January, mortgage rates fell, which is seen as a positive sign of the housing market’s recovery.Now more than two months have passed, not only the loan rate has been reduced, the pace of loan issuance is also accelerating.Financial policies continue to increase, purchase costs in the reduction, in the impact of multiple factors, the housing market spring seems to show a bit of warmth.However, market feedback is still far less than expected, according to February financial data showed the first negative growth in 15 years.At the bank level, they are experiencing a situation where they have enough credit but can’t release it.From the analysis of industry experts, in the short term mortgage rates still exist to continue to decline the possibility.The central bank cut benchmark interest rates in January, officially kicking off the rate-cutting campaign.”January loose, February wait-and-see, to March is the full start of action.”Liu Ju, head of the Qingdao trading service center of Shell House search, said that mortgage interest rates of major commercial banks are in the process of lowering.As of last week, HSBC’s lowest first-home loan rate was 5.15 percent, while most other banks maintained it at 5.3 percent, according to Data from Shell Housing.But there is news that in the field, the rate of decline is greater, for example, in Jinan province, there has been a bank interest rate “broken five”, dropped to less than 5%.Mortgage rates in Suzhou, one of the market’s bellwethers, have dropped even more. The Industrial and Commercial Bank of China, the Agricultural Bank of China and the Industrial And Commercial Bank of China have lowered their mortgage rates for first homes from 4.65 percent to 4.6 percent.According to data released by Shell Research Institute recently, in March 2022, the mainstream first mortgage interest rate in 103 key cities monitored by it was 5.34%, and the second mortgage interest rate was 5.60%, falling by 13 and 15 basis points respectively compared with last month.Interest rate cut, in the end can give home buyers save how much cost?There is a real estate consultant in the interview to calculate a bill to the reporter: Qingdao last year the highest interest rate ever reached 5.6%, with a house of 2 million yuan, down payment of 500,000 yuan loan 1.5 million yuan, loan 30 years.In the most special case, the 5.6% interest rate will repay more than 8,000 yuan per month, while the 5.15% interest rate will repay more than 7,600 yuan per month.After 30 years, it can return about 150,000 yuan less, and a car is saved.Procedures to relax up to two days on the loan interest rate cut, buyers brought visible benefits.But in practice, the savings may not impress home buyers.”Saving a car is an extreme situation.After the interest rate cut, customers can get about 0.15 points of interest bonus, which is equivalent to monthly repayment, which is more than 100 yuan.”Sun Peng, the manager of Lianjia Ocean View store, said that the actual decrease was not as big as expected because there were various loan discounts for the first house, and the tens of thousands of yuan saved by the 30-year loan was not a direct motivation for people to buy houses.’More attractive than the interest-rate cut is the shortening of the loan cycle,’ Mr. Sun said.”Last September and October were the strictest periods for loan approvals, and two or three months later, loans were relatively fast.”At that time, sun recalled, the loan stumped many customers who wanted to sell their old houses and buy new ones.In contrast, the current lending speed, Sun Peng with “the speed of light” to describe, “last week one of our customers is the Industrial Bank loan, with the certificate lending cycle only two days, customers are surprised.”Sun Peng introduced, the current Qingdao bank lending cycle is generally around 10 days, which is shorter than the usual one month or so lending cycle.And recently also interviewed a number of state-owned banks, joint-stock bank mortgage managers, from where they learned that this year’s mortgage lending cycle has basically returned to normal, and even accelerating.If it is a second-hand house, approval and loan can be completed within a month, while in the fourth quarter of last year, it may take four to six months;If it is a new house, the speed may be faster due to the less materials involved in submission.According to data from Shell Research Institute, the average loan period in 103 cities in March was about one month, close to the fastest pace in the third quarter of 2020.At present, nearly 50% of the cities have a loan cycle of less than one month, and 19 cities have a loan cycle of less than 20 days.But there has been no relaxation in the qualification requirements for loan owners, which still require banks to earn at least twice their liabilities.According to initial market expectations, the loosening of interest rates will pry some home buyers, thus boosting the total amount of mortgage loans.However, the actual situation is not as good as imagined, recently, the Central bank released the financial statistics for February this year, which shows that the loan of RMB increased by 1.23 trillion yuan in February, among which the resident medium and long term loans mainly for mortgage loans decreased by 45.9 billion yuan, showing the first negative growth since the statistical data began.In January alone, the figure was 742.4 billion yuan.”The negative growth of mortgage loans on the one hand shows the current market conditions of the housing market, on the other hand, it also reflects the current supply and demand of mortgage loans.”Liu Ju, head of the Qingdao trading service Center of Shell Fangzaofang, said that last year, the main reason for many banks to lend for a long period of time was the lack of credit lines, but now it is the opposite, the bank credit lines are abundant, but the depressed market is “money can not be released”, the state of loan supply exceeds demand.Under such circumstances, it is not difficult to understand that the bank cut interest rates and shorten the lending cycle.As for whether there is nearly a half possibility of interest rate reduction in the future, Liu Ju said that the current low interest rate has not changed the wait-and-see mood, under the pressure of supply and demand, there is still a possibility of interest rate reduction in the short term.After all, the central bank only sets the benchmark interest rate, and banks can move it up or down as they see fit.And in the face of a lot of cities lower than 5% interest rate, industry insiders predict that Qingdao’s mortgage interest rate is also expected to reach the lowest 5% mark in the short term.Whether it will be lower depends on how much pressure banks are under to lend.”After all, with interest rates below 5 percent, banks’ margins are already very thin in cost terms.”The personage inside course of study says.Will my monthly payment be less if the interest rate goes down?The interest rate cut is good for many people who are ready to buy houses, but many people who already have mortgages are more concerned about whether their monthly payments will be reduced.This is based on the quoted interest rate in the loan market, also known as LPR.Because according to relevant regulations, the mortgage whose interest rate is calculated by LPR should adjust the repayment interest rate according to the change of LPR interest rate. As for the bank’s own floating interest rate, it usually does not affect the effective loan contract.On January 20 this year, China’s five-year LPR fell 5 basis points.For those who have chosen LPR calculation, the new rate will be implemented from the date of re-pricing.How much will those 5 basis points reduce your monthly payments?Take a mortgage loan with a loan amount of 1 million yuan and a 30-year repayment of equal principal and interest as an example. Before the interest rate adjustment, the LPR was 4.65% and the monthly payment was 5,156 yuan.After the adjustment of the interest rate, the LPR is 4.60%, and the monthly payment at this time is 5126 yuan.Such calculation, the monthly amount reduced about 30 yuan.The drop is not obvious, perhaps the cost of a cup of milk tea.It’s worth noting that the LPR changes don’t take effect until the following year for people who have already borrowed to buy a house, meaning the rate cut won’t show up on mortgages until 2023.If the rate continues to fall in 2022, it will be available not only to new buyers, but also to those who previously opted for a floating rate, based on the latest rate.