Under the plan, homeowners would be able to renegotiate terms with their current lenders before January, when banks typically reprice mortgages, people familiar with the matter said, asking not to be identified discussing private information. According to Bloomberg they would also be allowed to refinance with a different bank for the first time since the global financial crisis, the people said.
Authorities are ramping up a push to reduce mortgage costs after the central bank encouraged such support last year and banks responded with a rare rate cut on outstanding mortgages of first homes. It wasn’t immediately clear if the latest considerations apply to all homes.
While lower mortgage rates would hurt profitability at state-run Chinese banks, authorities are facing renewed pressure to stem a housing-led slowdown in Asia’s largest economy.
“If implemented, the move would send a signal that the central government is intensifying measures to support overall economy, protect household wealth and spur consumption,” said Raymond Cheng, head of China property research at CGS International Securities Hong Kong. “It would also indirectly help the real estate sector.”
A Bloomberg index of Chinese developers jumped more than 8% in afternoon trading Friday, with Shimao Group Holdings Ltd. surging as much as 28% and China Vanke Co. jumping up to 17% in Hong Kong. China’s offshore yuan currency also hit the strongest in over a year, amid optimism that further property stimulus would ease market concerns about the housing downturn and China’s growth prospects.
