The mortgage interest rate will be re-signed starting today, here are the details of the 2020 mortgage interest rate re-signing!

Starting from today (March 1st), there will be an important adjustment to the mortgages of mortgage holders. Some mortgage holders will need to re-sign their contracts because the mortgage interest rates will be re-priced. Your choice will affect the amount of future monthly payments.

In accordance with the requirements of the central bank, starting from March 1, 2020, financial institutions should negotiate with existing floating-rate loan customers on the pricing benchmark conversion terms, and convert the interest rate pricing method agreed in the original contract to a pricing benchmark based on LPR plus points (the points can be negative), and the value of the points will remain unchanged for the remaining term of the contract; it can also be converted to a fixed rate.

How to understand

In short, the central bank has given mortgage holders a choice: should they choose a fixed interest rate or a floating interest rate of "LPR+plus points"?

Option 1, fixed interest rate. After choosing a fixed interest rate, your mortgage will maintain the current interest rate level and will not be affected by changes in the LPR interest rate.

Option 2: “LPR+add-on” floating interest rate. LPR is the loan market benchmark rate, a new mechanism introduced by the central bank in 2019. LPR is announced once a month and can rise or fall. The add-on value = the current execution interest rate level of the original contract - the LPR released in December 2019. The add-on value will remain fixed once it is determined.

In other words, if you choose the "LPR+plus point" floating interest rate, your future mortgage interest rate will change with the LPR, which will affect the monthly payment.

It should be emphasized that the borrower has only one option and cannot convert again after conversion.

What needs to be converted

If your mortgage meets the following three conditions at the same time, you need to convert:

1. Issued before January 1, 2020, or the loan contract has been signed but not yet issued;

2. Pricing based on the benchmark interest rate for loans (e.g. "10% increase in the benchmark interest rate" or "30% discount on the benchmark interest rate");

3. Floating interest rate (for example, the interest rate is adjusted on January 1st of each year). What does not need to be converted

1. Provident Fund personal housing loan;

2. Personal housing loans due before December 31, 2020;

3. Policy-based loans, such as national student loans, small guaranteed loans for laid-off and unemployed persons, etc.