BEIJING, Sept. 29 (Xinhua) -- China will implement interest subsidies for housing loans starting Oct. 1, 2026, as part of efforts to help reduce home-buying costs and better unlock the housing demand of residents.
With a tentative implementation period of one year, the fiscal authorities will provide an annualized subsidy of 1 percentage point for eligible first-time homebuyers, according to a notice jointly issued by the Ministry of Finance, the People's Bank of China and the National Financial Regulatory Administration on Tuesday.
This is the first time the central government has offered interest subsidies on commercial housing loans.
This interest subsidy policy is focused on first-time homebuyers. The floor area of each purchased unit must not exceed 120 square meters, and the purchase price must not surpass 1.5 million yuan (about 222,516 U.S. dollars).
Under this policy, the maximum amount of interest-subsidized loans can reach 1 million yuan, and the subsidy period can extend up to five years.
According to estimates, for a long-term 1-million-yuan commercial personal mortgage, the subsidies could help borrowers reduce cumulative interest payments by nearly 50,000 yuan.
By defining housing price, floor area and loan category, the policy aims to precisely benefit target groups and help lower-income families reduce their monthly mortgage burdens, the departments said.
The policy focuses on first-time buyers with essential needs, supporting families in purchasing small and medium-sized, and relatively low-priced homes, according to the departments.
The policy is expected to reduce the mortgage burden for new urban residents, newly employed college graduates, and urban wage-earning families, said Luo Zhiheng, chief economist at Yuekai Securities.
In recent years, China has introduced supply-side measures to support the development of the real estate market, including supporting the issuance of new special-purpose bonds for land reserves and supporting local governments in purchasing existing commercial housing for use as affordable housing. This time, the focus has shifted to the demand side, further expanding policy efforts through fiscal-financial coordination.
Industry insiders believe that interest subsidies can reduce home-buying costs, accelerate the destocking of new homes, and ease the funding pressure on real estate developers.
The policy clearly demonstrates strong support for rigid home-buying demand, or first-home demand, and will in turn influence subsequent replacement and upgrading demand, said Yan Yuejin, deputy director at E-house China R&D Institute.
Li Yujia, chief researcher at the Guangdong Housing Policy Research Center, said the interest subsidy policy will reduce the cost of residents' mortgage loans and improve their willingness to take on leverage, thereby restoring the financial accelerator effect of the real estate sector.
Data released by the National Bureau of Statistics earlier this month showed narrower year-on-year declines in home prices across major Chinese cities in August, pointing to further signs of stabilization.
In August, Chinese authorities deepened reforms to the housing provident fund system, and refined regulations on commercial housing sales and property financing.
The package of policies is working in a coordinated manner from both the supply and demand sides, aiming to improve market expectations, restore residents' willingness to buy homes, and promote the steady and healthy development of the real estate market, experts said. ■
