The slight differences in mortgage interest rates can significantly impact your total repayments over the coming decades. This article provides a detailed comparison of major banks’ mortgage rates, including the latest policies for first-home loans, second-home loans, and housing provident fund combination loans. It also offers tips on saving interest, bank selection advice, and an analysis of interest rate trends to help you save tens of thousands or even hundreds of thousands in interest payments.
1. Latest Mortgage Interest Rate Policies
1. Current Benchmark Rate (LPR)
- 1-year LPR: 3.45% (affects short-term loans)
- 5-year and above LPR: 3.95% (benchmark for mortgages, reduced by 0.25% in February)
- Interest Rate Floors: First home = LPR minus 20 basis points (minimum 3.75%), Second home = LPR plus 60 basis points (minimum 4.55%)
2. Interest Rate Ranges by Loan Type
| Loan Type | Interest Rate Range | Change Compared to 2023 |
|---|---|---|
| First Home | 3.75% - 4.05% | Decreased by 0.25% - 0.45% |
| Second Home | 4.55% - 4.95% | Decreased by 0.3% - 0.5% |
| Housing Provident Fund Loan | 3.1% (within 5 years), 2.85% (over 5 years) | Unchanged |
2. Top 5 Banks with Lowest Mortgage Rates
1. Bank of China (Lowest first-home rate 3.75%)
- Advantages:
✅ Nationwide implementation of LPR minus 20 basis points floor
✅ No penalty for early repayment (after 1 year) - Suitable for: Regular salaried employees
2. China Construction Bank (Second-home rate starting at 4.55%)
- Special Policies:
"Quick Loan" customers enjoy an additional 0.1% rate discount
High efficiency in approving combination loans (within 3 working days)
3. Industrial and Commercial Bank of China (Preferred clients from 3.78%)
- Exclusive Discounts:
Customers with deposits over 500,000 RMB get an extra 0.15% discount
Additional 0.05% discount for teachers, doctors, and similar professions
4. China Merchants Bank (Online application from 3.8%)
- Innovative Services:
Real-time monthly payment calculation via mobile banking
Fully online mortgage registration process
5. Postal Savings Bank of China (Lowest in counties: 3.7%)
- Regional Policies:
Additional 0.1% discount for rural household first-home buyers
Extra benefits for key rural revitalization counties
3. Interest-Saving Tips: How to Get the Lowest Rate?
1. Bank Comparison Strategy
- First-tier cities: Bank of China and Construction Bank usually offer the lowest rates
- Second- and third-tier cities: Local banks (e.g., Jiangsu Bank) may offer breakthrough rates
2. Interest Rate Negotiation Tips
- Sample Phrases:
"Bank XX offered me 3.8%, can you match this?"
"If I invest/deposit with your bank, can you lower the rate?"
3. Loan Combination Plans
| Plan | Composition | Combined Interest Rate | Interest Saved (1 million RMB over 30 years) |
|---|---|---|---|
| Optimal Combination | 600,000 RMB Provident Fund + 400,000 RMB Commercial Loan | 3.3% | Saves about 180,000 RMB compared to pure commercial loan |
| Secondary Combination | 800,000 RMB Commercial Loan + 200,000 RMB Renovation Loan | 4.0% | Saves about 80,000 RMB compared to pure commercial loan |
4. Mortgage Application Pitfall Guide
1. Beware of 3 Major Interest Rate Traps
❌ "Low interest rate" actually means floating rate: Confirm if the rate is fixed or floating LPR
❌ Hidden fees: Evaluation fees/processing fees may offset interest discounts
❌ Bundled sales: Requirement to purchase financial products/insurance to get lowest rate
2. Key Document Preparation
- Required Documents:
ID card + Household registration book
Income proof (monthly payment ≤ 50% of monthly income)
Down payment proof (at least 30%) - Bonus Documents:
Provident fund payment certificate (to increase approval amount)
Large deposit certificates/investment proof (to negotiate better rates)
5. Mortgage Interest Rate Trend Forecast
- Continued decline: 5-year LPR expected to drop another 0.1%-0.2% within the year
- Regional differentiation: First-tier cities may hit bottom rates, while third- and fourth-tier cities still have room to reduce
- Policy benefits: Multi-child families/green buildings may enjoy additional discounts
Best Time to Apply: Before Q3 (to catch the low-rate window)
