PBOC encourages commercial banks to lower existing mortgage rates

Potential homebuyers look at property models in Huaian, Jiangsu province. (Photo by Chen Liang/For China Daily)

The People's Bank of China, the country's central bank, will encourage commercial banks to lower existing mortgage interest rates, bringing them to a level close to newly issued mortgages, said PBOC Governor Pan Gongsheng.

This is expected to result in an average reduction of existing mortgage interest rates of about 0.5 percentage points, Pan said at a news conference on Tuesday.

Meanwhile, the central bank will align the down payment requirements for first and second homes. The nationwide minimum down payment ratio for second-home loans will be adjusted from the current 25 percent to 15 percent, he said.