The People's Bank of China decided to lower the interest rate of personal housing provident fund loans by 0.25 percentage points from May 8, 2025, and reduce the interest rate of first-home homes for more than five years from 2.85% to 2.6%. What are the scope of this adjustment? How much interest expense will be reduced?
How much will the interest rate for personal housing provident fund loans be reduced after this adjustment? This varies depending on factors such as the borrower's loan term. The interest rates for personal housing provident fund loans for less than 5 years (including 5 years) and more than 5 years will be adjusted to 2.1% and 2.6% respectively, while the interest rates for personal housing provident fund loans for less than 5 years (including 5 years) and more than 5 years will be adjusted to no less than 2.525% and 3.075% respectively.
The reporter learned that the scope of this adjustment includes both newly issued housing provident fund loans and existing housing provident fund loans. The newly issued housing provident fund loans will directly implement the new interest rate; while the previously issued housing provident fund loans will be lowered from January 1, 2026.
Taking a first personal housing provident fund loan with an amount of RMB 1 million, a term of 30 years, and equal principal and interest repayment as an example, the monthly payment will be reduced from RMB 4,136 to RMB 4,003, a decrease of approximately RMB 133, and the total interest expenditure will be reduced by approximately RMB 47,600.
The People's Bank of China said that reducing the housing provident fund loan interest rate by 0.25 percentage points is a powerful measure for the People's Bank of China to promote the implementation of consumption policies and measures. Industry experts believe that the reduction of housing provident fund interest rates can effectively lower the threshold for residents to buy houses, fully reflect the preferential efforts of housing provident fund loans, stimulate residents' enthusiasm for housing consumption, better meet housing consumption needs, further release the potential of rigid and improved housing demand, and support the sustained and healthy development of the real estate market.
(CCTV reporter Sun Yan)
