Industry | Start on March 1st! The biggest suspense of the property market in 2020

The economic property market in 2020 is destined to be full of variables.
Recently, as to whether the “pricing benchmark for stock mortgages will be converted to the loan market quoted interest rate (LPR)” from March 1st, the relevant person in charge of the central bank said that after careful investigation, he decided not to change the plan and continue to advance.
This means that the "mortgage change anchor" determined at the end of last year will proceed as usual, and will officially land in March, and the biggest real estate market change in 2020 has finally come.
So, what does it mean to change the mortgage interest rate? How much impact will it have? 01 01 mortgage anchor change, what is? What is a mortgage swap? Changing the anchor of the mortgage is undoubtedly one of the biggest changes in the property market in 2020.
The so-called mortgage swap refers to the conversion of all existing mortgages to the "LPR model.
" All future mortgages will use the LPR interest rate as the reference benchmark.
Whether housing loans rise or fall, increase or decrease, all depend on the LPR interest rate.
Explain that in the past, when we bought houses, we used the policy interest rate as the benchmark.
The policy interest rate was determined by the state and usually adjusted every few years.
The current benchmark interest rate for policy loans is 4.
9%, which has not changed since 2015.
However, in recent years, not only the domestic and international economic situation has changed, but the property market is no longer comparable.
The five-year unchanged policy benchmark interest rate obviously cannot adapt to the development of the situation.
As a result, the LPR interest rate turned out.
This interest rate is comprehensively quoted by a number of commercial banks, representing the market interest rate, and is released by the central bank on the 20th of each month, and it is always changing.
LPR interest rates are divided into 1-year LPR interest rates and 5-year LPR interest rates.
The former is mainly for entities and the latter is mainly for real estate.
Doing so will not only bring interest rates closer to the real market, but also provide the possibility for targeted regulation of the entity and the property market.
02 02 Everyone must switch? Everyone must switch?Do everyone have to perform LPR conversion? Yes, both new and old, even if it is a mortgage signed 10 years ago, must undergo LPR conversion.
This policy is mandatory and there is no choice.
The only exception is that unless the mortgage is about to expire within a year, it doesn't matter whether you change it or not.
The conversion of LPR will begin on March 1 and is expected to be completed by the end of August.
After the detailed rules are promulgated at that time, they will be handled by major commercial banks, which can be handled offline or online.
03 03How to convert? How to convert? For new home buyers and original home buyers, what is the difference between the LPR model? For home buyers after March 2020, the mortgage interest rate = the latest 5-year LPR interest rate + local plus points.
Among them, the 5-year LPR interest rate is released by the central bank on the 20th of each month, adjusted once a month, subject to the latest, and the base for adding points is determined by the local government.
For example, the latest 5-year LPR interest rate in February 2020 is 4.
75%, and the first home loan in Suzhou adds 123 basis points (one basis point equals 0.
01%), and the current mortgage interest rate is equal to 5.
98% (4.
75%+1.
23%) ).
In the same way, if the Beijing first home loan only adds 50 basis points, then the Beijing first home loan interest rate is equal to 5.
25% (4.
75%+0.
5%).
For old home buyers, stock mortgages before 2019 must be converted to the LPR model starting in March, and a base number must be determined at the same time.
Once the point addition base is determined, it will remain unchanged during the entire 20 or 30 year repayment period.
04 04Add points, how to determine? Add points, how to determine? It can be seen that adding points is the key to the key.
We have learned that for new buyers, the additional points are determined by each region.
Adding a point is similar to the past 20%, 30% and other upward ratios.
Of course, the same as the rising ratio, the property market control stage is different, the city is different, and the base number of points is completely different.
There are 50 basis points for the first house in a city, and 100 basis points for the city.
For old home buyers, adding a point to the base is determined by the "reverse method".
The additional point is the difference between the original contract interest rate and the 5-year LPR in December 2019 (4.
8% for the current month), with the shortest one-year adjustment.
Simply put, plus point = current actual mortgage interest rate -4.
8%.
To give a simple example, if the contract mortgage interest rate in 2018 is 5.
39%.
After changing the anchor, add point base=5.
39%-4.
8%=59 base points.
It should be noted that once the points are confirmed, it will accompany the entire repayment cycle.
05 05 Mortgage discount, is there any more? Mortgage discount, is there any more? The discount still exists, because the plus point can be negative.
As we all know, before 2017, especially in 2014 and 2015, the interest rates of commercial loans in many cities started with a 20% discount.
At that time, the mortgage interest rate was far lower than the benchmark interest rate of 4.
9%.
As a simple example, if you buy a house in 2015 and get a 15% off mortgage, the actual interest rate is 4.
165%.
So, after the mortgage interest rate is switched, what will the new mortgage look like? Plus point = actual mortgage (4.
165%)-December 2019 5-year LPR interest rate (4.
8%) = -0.
635% (-63.
5 basis points).
Yes, you read that right.
After the mortgage is changed, the new mortgage interest rate = the latest 5-year LPR interest rate-63.
5 basis points, and the discount still exists.
Similarly, if the 5-year LPR interest rate drops to 4.
7% in 2021, the actual mortgage interest rate that year can be adjusted to 4.
065% (4.
7%-63.
5 basis points), which will benefit from this discount throughout the repayment cycle.
06 06Choose a fixed interest rate, or change every year? Choose a fixed interest rate, or change every year? This time the mortgage interest rate changed, the central bank gave everyone an opportunity to change their mortgage.
The central bank provides two options: one is to choose a fixed interest rate, which will remain unchanged for the entire mortgage cycle for the next 20 or 30 years.
If the actual interest rate is 5.
39% before 2019, choosing a fixed interest rate means that it will be 5.
39% in the next 20 years.
The second is a floating interest rate that changes every year.
The mortgage interest rate can be adjusted once a year.
If the latest LPR interest rate drops that year, the mortgage interest rate will also decrease.
There is only one chance.
So, should we choose a fixed interest rate or a floating interest rate that changes every year? The answer is obvious, choose a floating interest rate that changes every year.
The advantage of a fixed interest rate is that if you raise interest rates in the future, your own interest rates will not follow the rise.
The advantage of floating interest rates is that if interest rates are cut in the future, mortgage interest rates can always be adjusted.
It is not difficult to see that the crux of the problem lies in whether the future will be a major interest rate hike cycle or a major interest rate cut cycle? You know, the decline in interest rates is the general trend.
At present, the global economy has entered the era of great easing, and lower interest rates are the general trend.
Many European and American countries have entered the era of negative interest rates.
my country's interest rates have fallen sharply compared to a few years ago.
In China, the benchmark housing loan interest rate in 2010 was close to 7%, but now it is less than 5%.
The continued decline in interest rates may be the general trend in the next 5 to 10 years.
In this context, fixed interest rates clearly deviate from the trend of the times.
07 07 Is the mortgage interest rate going up or down? Is the mortgage interest rate going up or down? Is the mortgage interest rate going up or down? At least in 2020, mortgage interest rates will remain unchanged.
In other words, what is your actual mortgage interest rate in 2019, and how much will you maintain after changing the anchor? This is why the central bank has repeatedly emphasized that the mortgage will not change.
For example, if the actual mortgage interest rate in 2019 is 5.
39%, then the actual mortgage interest rate in 2020 will still be 5.
39%.
The difference is that 5.
39% in 2019 was caused by a 10% increase in the policy interest rate (4.
9%*1.
1), while 5.
39% today is caused by a five-year LPR plus point (4.
8%+59 basis points).
What will happen in 2021? Note that the mortgage interest rate can be adjusted once a year, and the specific month of the adjustment depends on the contract.
For example, if the adjustment is made in May 2021, then the mortgage interest rate in 2021 = the latest 5-year LPR interest rate in April 2021 + 0.
59%.
If the 5-year LPR interest rate was reduced to 4.
6% at that time, then the mortgage interest rate in 2021 would drop to 5.
29%.
What is the impact of 08 08 on provident fund loans? What is the impact on provident fund loans? This time the mortgage interest rate is changed, mainly in terms of commercial loans, it will not affect provident fund loans for the time being.
As we all know, provident fund loans are policy loans, with interest rates far lower than commercial loans.
Since 2015, the commercial loan interest rate has climbed from 4.
9% to around 6%, while the provident fund loan interest rate has been maintained at 3.
5%.
Therefore, it is precisely because of the policy benefits of the provident fund, plus factors such as reasonable tax avoidance and impact on actual income, that Huang Qifan's proposal on "abolishing the housing provident fund" a few days ago stirred up waves and caused controversy.
09 09 What is the power of changing the anchor of the mortgage? What is the power of changing the anchor of the mortgage? Why does the central bank carry out the LPR model reform? Two reasons: one is to carry out interest rate market reforms.
The monthly LPR interest rate is obviously better able to adapt to the rapidly changing market changes.
The second is to separate the real estate interest rate from the real interest rate to provide the possibility for targeted regulation of the property market.
This time, the central bank created the "1-year LPR interest rate" and the "5-year LPR interest rate".
The former is aimed at the real economy and the latter is aimed at real estate.
These two interest rates will not change simultaneously.
You know, in the latest interest rate, the 1-year LPR was reduced by 10 basis points, while the 5-year LPR was reduced by only 5 basis points.
In the past year, the 1-year LPR has been adjusted 4 times, with a cumulative reduction of 26 basis points, while the 5-year LPR has been adjusted only 2 times, with a cumulative reduction of 10 basis points.
This is where the power of directional control and asymmetric interest rate cuts lies.
In order to cope with the impact of the epidemic, the real economy can cut interest rates drastically, and in order to prevent floods from flooding the property market, real estate can only cut interest rates on a small scale or not.
In the future, such a scenario is likely to occur: real interest rates continue to decline, and instead of following the decline, the property market interest rates remain unchanged or even continue to rise.
Targeted interest rate cuts by entities + "targeted rate hikes" in the property market are not impossible.
This is the regulatory pattern that we must face again in 2020.
In the future, there will only be many more tools to regulate and control the property market in China, and the restrictions on the property market will only increase but not drop.
The era of streaking policies is long gone.