Shenzhen lowers interest rates for housing provident fund loan

Shenzhen lowers the interest rates for personal housing provident fund loans granted on and after May 8, whille the new rates will be applied to loans obtained before May 8 starting July 1.

The move followed recent changes by China’s central bank to lower personal housing provident fund loans by 0.25 percentage points from May 8.

Under the updated policy, the interest rates for second-home loans in Shenzhen will be set at 2.525% for terms of five years or less (including five years), and 3.075% for terms over five years. For first-home loans, the rates are adjusted to 2.1% for five years or less, and 2.6% for over five years.

Loans that were already disbursed before May 8 will have the new rates applied automatically starting July 1.

For combination loans of both provident fund and commercial banks, only the provident fund portion will benefit from the rate adjustment. Borrowers will need to negotiate the interest rate of the commercial loan portion directly with their lending banks.

Additionally, the application of these regulations depends on where the applicant’s provident fund contributions are made. If contributions are deposited in Shenzhen, Shenzhen’s rules will apply. For accounts based outside Shenzhen, the rules of the local provident fund management center will govern.

These adjustments aim to ease the financial burden on homebuyers and support Shenzhen’s stable housing market.