Chinese banks told to cut rates on existing mortgages

China's central bank said on Sept 29 it would tell banks to lower mortgage rates for existing home loans before Oct 31, as part of sweeping policies to support the country's beleaguered property market as the economy slows.

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Commercial banks should, in batches, reduce interest rates on existing mortgages to no less than 30 basis points (bps) below the loan prime rate, the central bank's benchmark rate for mortgages, according to a statement released by the People's Bank of China (PBOC).

It is expected to cut existing mortgage rates by about 50 bps on average.

Across China, a slew of policies including reductions in down payment ratios and mortgage rates have been introduced in 2024 to support China's crisis-hit property market.

But the stimulus measures have struggled to boost sales or increase liquidity in a market shunned by buyers that has remained a big drag on broader economic growth.