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Chinese Cities Break Mortgage Rate Floor - Daily

CHINA PRESS
MNI (Singapore)

Several Chinese cities including Tianjin and Shijiazhuang have seen the mortgage rate for first-home buyers drop below 4% in October after the People’s Bank of China allowed eligible cities with fast falling home prices to let rates fall below the floor of 4.1%, the Securities Daily reported. There is likely to be a sharper reduction in mortgage rates across the country, including first- and second-tier cities, as the five-year Loan Prime Rate - which lenders base their mortgage rates on - will decline 15-30 bps in Q4, the newspaper said citing Wang Qing, chief analyst with Golden Credit Rating. He said there was room for a lower LPR following a sharp drop in deposit rates even if the PBOC keeps steady the rate on its Medium-term Lending Facility, which feeds into the LPR.

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