Starting October 1, the national mortgage interest subsidy policy for homebuyers officially came into force. Banks across the country moved swiftly, clarifying service procedures and upgrading system functions without delay to materialize the “no separate application, automatic benefit access” mechanism, helping eligible homebuying families receive the benefits of the subsidy at an early date.

Ms. Chen, who has worked in Guangzhou for many years, recently purchased a 92-square-meter two-bedroom apartment and applied for an 800,000-yuan housing loan from the Agricultural Bank of China. With the interest subsidy, she is expected to save roughly 40,000 yuan in total interest payments. “After years of striving in Guangzhou, I finally have my own small home. I also get to enjoy this favorable subsidy policy, which lightens my financial burden a great deal,” said Ms. Chen.

The mortgage interest subsidy available to Ms. Chen stems from the policy jointly issued on September 29 by the Ministry of Finance, the People’s Bank of China and the National Financial Regulatory Administration. Under the policy, eligible residential mortgage loans can receive an interest subsidy of 1 percentage point for a maximum term of five years, and the maximum loan principal qualifying for the subsidy is 1 million yuan. The policy will be tentatively in place for one year.

The day after the policy was released, the six major state-owned banks, namely ICBC, ABC, Bank of China, China Construction Bank, Bank of Communications and Postal Savings Bank of China, issued separate announcements to actively push forward the implementation of the homebuyer mortgage interest subsidy policy. The banks restated the three strict criteria set out in the policy: the newly issued commercial personal housing loan must be used to purchase a first home; the floor area of the property shall not exceed 120 square meters (inclusive); and the purchase price of the property shall not exceed 1.5 million yuan (inclusive).

Industry insiders estimate that, at the current interest rate level for commercial personal housing loans for first homes, the 1-percentage-point subsidy equals roughly one-third of the rate discount. For a long-term commercial personal housing loan of 1 million yuan, the subsidy policy can reduce the borrower’s total interest payment by nearly 50,000 yuan at most.

On the first day of policy implementation, multiple banks disbursed qualified subsidized mortgage loans.

In Sichuan, Ms. Luo, who had long planned to buy a home, made up her mind to purchase a property the day after the subsidy policy was unveiled. After securing a 750,000-yuan mortgage loan from Bank of China, she is expected to save more than 30,000 yuan in interest over five years. “The subsidy genuinely cuts home purchase costs,” Ms. Luo remarked.

A source with China Construction Bank told reporters that on the policy launch day, CCB branches in Shuangliu, Yibin and Nanchong of Chengdu, Sichuan, issued subsidized loans totalling 2.1 million yuan to four homebuying customers, covering both new commercial housing and second-hand homes.

The “Golden September and Silver October” period marks the traditional peak season for the property market. To ensure the pro-people policy reaches targeted beneficiaries accurately, banks have taken the initiative to set up service booths at real estate projects, housing fairs and agency stores, providing one-on-one professional calculations to serve homebuyers with rigid housing demand.

Reporters learned that on the first day of the National Day holiday, ICBC Chengdu Branch issued eight housing loans eligible for the subsidy, with a total disbursement of 4.228 million yuan. Over the National Day holiday, CCB Guangdong Branch processed subsidized mortgage loans worth over 500 million yuan.

Mr. Chen from Weixian County, Handan in Hebei Province, who works in southern China for most of the year, returned to his hometown to buy a property during the holiday and applied for a 500,000-yuan housing loan. ABC Handan Branch opened a green channel for homebuyers returning to their hometowns. “Bank staff explained the policy clearly. I could successfully apply for the loan even during the holiday, and the subsidy will save me about 25,000 yuan in interest,” Mr. Chen said.

Besides serving homebuyers returning to their hometowns, financial institutions also focus on the housing needs of new residents to deliver policy dividends directly to prospective buyers.

Ms. Wu, a new resident in Hangzhou, had hesitated before buying a second-hand apartment. “The ICBC account manager helped me calculate. With the 480,000-yuan loan, I can save approximately 16,000 yuan in interest over five years thanks to the subsidy, which pushed me to sign the purchase contract quickly,” Ms. Wu said.

In addition, all banks are actively rolling out the “no separate application, automatic benefit access” model, optimizing workflows and simplifying application procedures.

“Homebuyers do not need to submit a separate application for the subsidy. We will make an initial assessment during loan processing and inform applicants of details including the subsidy ratio, term and amount. Once the loan is approved, the subsidy amount will be automatically deducted from each monthly repayment,” a CCB official explained.

Banks stated they will continue to step up publicity of the mortgage subsidy policy, optimize business procedures and service experience, further refine the delivery of the mortgage interest subsidy policy, and extend the benefits to more families with rigid housing demand.

Source: Xinhua News Agency