Bank Stock Mortgage Interest Rates in Changzhou Drop as Banks Compete for Market Share
On July 21st, it was reported that some commercial banks in Changzhou have agreed to lower their stock mortgage interest rates. While no official guidance document or specific rules have been issued by the Changzhou City Commercial Bank, lenders have communicated with banks regarding stock mortgage rates.
However, it has come to light that the original article from Changzhou Daily, which stated that banks have agreed to reduce stock mortgage interest rates, has been revised. The revised article no longer includes this statement.
It has been reported that in Changzhou, individuals can now convert existing pure commercial loans into a combined loan form of “commercial loans plus provident fund loans” by signing a new contract. The interest rate of commercial loans follows the current new interest rate policy. Nonetheless, state-owned banks and commercial banks in cities such as Shanghai, Wenzhou, Taizhou, and Hangzhou have yet to establish relevant policies for stock mortgage replacements.
According to a chief researcher at the Guangdong Housing Policy Research Center, the first quarter of this year saw a decrease in the balance of existing housing loans, marking the first decline in this area. This decrease may become a general trend, indicating that the mortgage loan market is shrinking. Banks, facing the challenge of increasingly scarce assets, view mortgages as high-quality assets for capital occupation and risk control. Therefore, some banks may lower their LPR (Loan Prime Rate) plus points to attract new customers and entice customers from other banks to apply for mortgages with lower interest rates.
The focus on stock mortgages arises from the recent announcement by the central bank that the LPR has dropped by a total of 45 basis points, indicating a top-down “interest rate cut” move. It is believed that the housing credit market will enter the stock era, with banks engaging in a “battle” to seize stock resources. This shifting landscape will transform the bank’s business behavior from an incremental era of expanding the new mortgage loan market to a stock era of acquiring stock mortgages from other banks.
In adapting to this stock era, banks will undergo significant changes in their business strategies. Previously focused on expanding the new mortgage loan market by working with developers’ mortgage agents, banks will now shift towards grabbing stock mortgages from other banks. This transformation is seen as an inevitable trend in the mortgage market, which has transitioned from a “seller’s market” to a “buyer’s market.”
With the potential for lower stock mortgage interest rates and increased competition among banks, customers may find themselves in a more favorable position when seeking loans or refinancing their existing mortgages. This shift in the market dynamics could have a significant impact on the housing credit market in Changzhou and beyond.