CHI CB issued a notice to improve the interest rate pricing mechanism for commercial personal housing loans, and promote reduction of stock housing loan interest rates.
Follows CHI CB Aug. 2019 issued notice on limits for mortgage rates, see #64205.
Interest Rates
Starting Nov. 1, 2024, borrowers with floating-rate commercial personal housing loans can negotiate with financial institutions to agree on an interest rate repricing cycle.
On repricing date, pricing benchmark will be adjusted to the most recent month's loan prime rate (LPR); repricing cycle, adjustment method to be clearly specified in contract.
If floating interest rate on a commercial personal housing loan deviates from national average for newly-issued commercial personal housing loans by a certain margin, the borrower can negotiate to replace the existing loan with a new floating-rate loan.
Financial institutions should actively promote, explain, and provide consulting services regarding these policies, ensuring that borrowers' contract rights are protected.
Effectiveness
Changes will take effect from Nov. 1, 2024; notice of Aug. 2019 (#64205) is repealed.