THE housing loan interest rate for first-time buyers in Shenzhen will be no less than 5.15 percent based on the latest loan prime rate (LPR) with a term of over five years, the Shenzhen Special Zone Daily reported, citing information from commercial banks in Shenzhen.

Since Oct. 8, the interest rate for newly issued individual commercial housing loans is based on the latest month’s LPR from the corresponding term. Housing loan contracts that were inked before Oct. 8 are not subject to the reform, according to the country’s central bank.

At the same time, the housing loan interest rate for first-time buyers should not be lower than the LPR of the corresponding term, while that for second-time buyers should not be lower than  the LPR plus 60 basis points, according to the national policy.

After the reform, the housing loan interest rate for first-time buyers in Shenzhen will be no less than 5.15 percent, while that for second-time buyers will be no less than 5.45 percent. The rates are basically in line with the previous ones, according to the report.

Data shows that the country’s average housing loan interest rate for first-time buyers was 5.47 percent in August, up three basis points quarter on quarter. The average figure for second-time buyers was 5.78 percent, up two basis points quarter on quarter.

After the adjustment, the mortgage loan interest rate for the city’s first-time buyers should not be lower than the LPR plus 30 basis points, while that for second-time buyers should not be lower than the LPR plus 60 basis points.

The reporter with the Daily learned from a Shenzhen branch of China Construction Bank that the monthly payment for a mortgage of 1 million yuan (US$139,997) with a term of 20 years for the first individual commercial housing loan will only have a 2.78-yuan difference compared to the situation before the reform.

The benchmark set by the local market suggests that  housing loan interest rates will remain stable for a long period of time, according to the report.   (Wang Jingli)