Recently, after the reduction of LPR (Loan Market Quotation Rate), different cities have adopted differentiated adjustment strategies for housing loan interest rates. Among them, several banks in first tier cities such as Beijing and Shanghai have responded first by lowering the interest rate for first-time home loans to 3.05%; Meanwhile, cities such as Suzhou, Nanjing, and Guangzhou have stabilized the interest rate for first-time home loans at 3% by flexibly adjusting the increase in points. At the same time, how to adjust the interest rates of new and existing housing loans has become a focus of attention for home buyers and investors. On May 20, the People's Bank of China authorized the National Interbank Funding Center to announce that the loan market quoted interest rate on May 20, 2025 was 3% for 1-year term LPR and 3.5% for more than 5-year term LPR. The LPR of both varieties was 10 basis points lower than the previous value. With the dynamic adjustment of the market, the interest rates for first-time home loans in various regions have shown a trend of differentiation and evolution. Banks in first tier cities such as Beijing and Shanghai were the first to respond. The reporter learned from the personal loan departments of several banks in Beijing that the current housing loan interest rates have completed a new round of reduction: the newly issued first home loans are subject to a 3.05% interest rate standard; In terms of second homes, the interest rate for commercial loans within the Fifth Ring Road has been adjusted to 3.45%, while the interest rate for foreign loans outside the Fifth Ring Road has been reduced to 3.25%. Several banks in Shanghai have also adjusted the interest rate for first-time home loans to 3.05%, the interest rate for second home loans in the main urban area to 3.45%, and the interest rate for second home loans in areas such as Lingang and Jiading to 3.25%. However, not all cities have directly followed the LPR to lower their first home loan interest rates. Previously, the interest rate for first-time home loans in cities such as Guangzhou, Suzhou, Nanjing, and Hefei had reached 3%. After the LPR was lowered this time, the interest rate bottom line of 3% was maintained by adjusting the percentage increase. Taking Guangzhou as an example, before the LPR reduction, some banks implemented LPR-60 basis points, or 3%, for first-time home loan interest rates; After the LPR reduction, banks will adjust the percentage increase to LPR-50 basis points, while the actual interest rate remains unchanged at 3%. It is reported that the decrease in LPR does not directly mean that the interest rate of new housing loans will definitely decrease. The actual interest rate of housing loans is composed of LPR and bonus points, which are determined by banks based on their own situation and other factors. The bonus points vary among different banks and regions, which leads to different performances of new housing loan interest rates in different cities. Wang Qing, Chief Macro Analyst of Dongfang Jincheng, stated in an interview with reporters that some regions have recently made strategic adjustments to the increase in mortgage interest rates, with the core goal of maintaining the actual mortgage interest rate within a reasonable range of 3% or above. Cities that actively reduce mortgage interest rates and add points generally show a trend of recovering real estate activity. This phenomenon reflects the transformation of the local housing loan market pattern, with banks having more pricing autonomy in the housing loan business. From the overall development trend of the real estate market, with the dynamic evolution of the market environment, banks in the above-mentioned cities are expected to gradually lower mortgage interest rates, further stimulating the potential for housing consumption. The adjustment path of new and old mortgage interest rates has attracted attention. This LPR adjustment not only affects new mortgage customers, but also triggers expectations from existing mortgage customers for a decrease in interest rates. It is understood that newly added housing loans will be priced directly based on the latest LPR and will be executed as early as the next day; The adjustment of interest rates for existing mortgage loans must follow the "repricing date" rule stipulated in the loan contract (the date agreed upon by the borrower and the bank for interest rate adjustment). The head of the personal loan department of a state-owned large bank told reporters that the adjustment of the interest rate of existing housing loans is closely related to the "repricing date" agreed in the loan contract. If the borrower's repricing date is January 1st of each year and the repricing cycle is 1 year, even if the LPR is lowered in May, the mortgage interest rate will not immediately change and will have to wait until the next repricing date, January 1st, 2026, to adjust according to the new LPR. If the repricing cycle has been adjusted to 3 months and the adjusted repricing dates are January 1st, April 1st, July 1st, and October 1st, then the interest rates for this type of mortgage will be adjusted on July 1st. For homebuyers, a reduction in LPR means a direct decrease in loan costs. Taking Beijing as an example, before this adjustment, the interest rate for first-time home loans was 3.15% (LPR-45 basis points). After the LPR was lowered, the interest rate for first-time home loans became 3.05%, further reducing the repayment pressure on homebuyers. Assuming a homebuyer takes out a loan of 1 million yuan with a repayment period of 30 years and adopts an equal principal and interest repayment method, the monthly repayment amount before adjustment is approximately 4491 yuan, and the total interest expense is approximately 616800 yuan; After adjustment, the monthly repayment amount decreased to 4437 yuan, and the total interest expense decreased to 597300 yuan. The monthly repayment amount decreased by 54 yuan, and the total interest expense decreased by about 19500 yuan. Chen Wenjing, Director of Policy Research at the Zhongzhi Research Institute, told reporters that the recent reduction in LPR for more than 5 years will help guide the further decline of mortgage interest rates in various regions, continuously reduce the cost of home ownership for homebuyers, support the release of residents' housing demand, and play a positive role in consolidating the stable situation of the real estate market. In addition, the LPR reduction this time will also drive the adjustment of existing housing loan interest rates. After the repricing of mortgage interest rates, the interest rates for existing mortgages will decrease accordingly, thereby reducing the repayment pressure on residents who have already purchased homes and stabilizing the expectations of homebuyers. Looking ahead, industry experts believe that there is still room for a decline in LPR and mortgage interest rates. Wang Qing stated that there is still room for further downward adjustment of LPR in 2025. Considering the need to further strengthen the policy of stabilizing the real estate market, especially the central bank's announcement on May 7th to lower the housing provident fund loan interest rate by 0.25 percentage points, which has opened up space for the later reduction of residential commercial housing loan interest rates, regulatory authorities may push for a greater reduction in residential housing loan interest rates by separately guiding the issuance of LPR quotes for more than 5 years. (New Society)