The Industrial and Commercial Bank of China (ICBC) has announced an adjustment to the interest rate of existing first-home personal housing loans, effective from Thursday. The bank will negotiate the loan execution rate with existing personal housing loan customers, according to an official announcement issued by ICBC.
The adjustment applies to personal housing loans that meet several conditions. Firstly, the loan disbursement time or contract signing time should be before August 31, 2023. Secondly, the loans must be commercial personal housing loans used for purchasing residential buildings, including ordinary purely commercial personal housing loans and commercial personal housing loans in provident fund portfolio loans. Finally, they must be the first set of personal housing loans, adhering to the interest rate standard of the first home loan in the city where the original loan was issued.
The adjusted interest rate level can be reduced to the lower limit of the interest rate policy of the city where the original loan was issued. However, if a loan is currently in a bad state, customers must return the outstanding principal and interest before applying for an interest rate adjustment.
The announcement also outlined specific rules for different types of floating rate loans. For instance, loans issued before October 2019 can be adjusted to the corresponding term Loan Market Quotation Rate (LPR) without adding points. Floating rate loans issued from October 2019 to May 2022 can be adjusted to the lowest limit of the national first home loan interest rate policy. Meanwhile, floating rate loans issued after May 2022 that implement LPR pricing can be adjusted to LPR-14BP.
Existing housing loans currently priced at fixed interest rates or benchmark interest rates need to be actively applied for interest rate adjustment by the Bank. They will first be converted into LPR-priced floating rate loans in accordance with relevant requirements and then have their loan interest rate adjusted according to specific rules.
ICBC will adjust the contract loan interest rate in batches on September 9, 2023, and implement the new interest rate level from the same day after batch adjustment. Existing mortgage customers who are currently pricing at fixed or benchmark interest rates can apply to ICBC from September 9, 2023 onwards.
Customers who apply for interest rate adjustment after October 10, 2023, including existing mortgage customers who have added the "second set to the first set", returned the outstanding principal and interest of non-performing loans, and are currently pricing at fixed interest rates or benchmark interest rates, can continue to apply to ICBC.
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