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China's Major Banks to Cut Mortgage Rates by 30 Basis Points Starting October 25

China's major state-owned banks are set to reduce existing mortgage rates by 30 basis points below the Loan Prime Rate starting October 25, as part of efforts to stimulate the economy.

In a significant move to stimulate the economy, China's major state-owned banks have announced plans to cut existing mortgage rates by 30 basis points below the benchmark Loan Prime Rate (LPR) starting October 25. This decision comes as part of a broader strategy by Chinese authorities to boost the property market and address weak domestic demand.

The banks involved in this initiative include some of the largest financial institutions in China, such as the Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, and China Construction Bank. These banks have stated that the rate adjustments will be implemented in batches, and customers will not need to apply for the changes.

The People's Bank of China had previously requested commercial banks to lower interest rates on existing mortgage loans by the end of October, as part of a series of stimulus measures aimed at reviving an economy that has been struggling with a prolonged property sector crisis and low consumption levels.

The rate cuts will apply to most existing mortgages, except for second homes in major cities like Beijing, Shanghai, and Shenzhen, where rates will be adjusted to the local lower limit. This move is expected to ease the financial burden on homeowners and potentially increase consumer spending, which is crucial for economic recovery.

Economists have noted that while these measures are a step in the right direction, further actions may be necessary to fully address the economic challenges facing China. The Finance Minister is expected to announce additional fiscal stimulus measures in the coming days, which could provide further support to the economy.

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