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China further eases mortgage loan rate guidance to spur demand

Chinese financial authorities on Sunday allowed a further cut in mortgage loan interest rates for some home buyers, in another push to prop up its property market and revive a flagging engine of the world's second-largest economy.

For purchases of first homes, commercial banks can reduce the lower limit of interest rates on home loans by 20 basis points, based on the corresponding tenor of benchmark Loan Prime Rates (LPRs), the People's Bank of China (PBOC) and China's Banking and Insurance Regulatory Commission said in a statement.

The cut aims to support demand and promote stable and healthy development of the real estate market, the statement said.

In its monthly fixing in April, the PBOC kept its one-year LPR unchanged at 3.70% and the five-year LPR, typically used as a benchmark for mortgage loans, steady at 4.60%.

Banks in many cities cut mortgage rates in the first quarter following calls from authorities to support buyer sentiment in a market rocked by a liquidity crunch and troubled developers last year, and now by nationwide COVID-19 outbreaks.


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