Three major China banks to lower rates on existing first-home mortgages

People walk past a branch of Industrial and Commercial Bank of China (ICBC) in Beijing, China April 1, 2019. REUTERS/Florence Lo/File photo

BEIJING  – Three of China’s major state banks said on Thursday they will start to lower interest rates on existing mortgages for first-home loans.

The move is one of several support measures flagged by Beijing in recent weeks for the country’s crisis-ridden property sector amid mounting concerns over the health of the world’s second-largest economy.

Interest rates on existing first-home loans will be cut to the level in place when a home was purchased, the Industrial and Commercial Bank of China Ltd (ICBC), Agricultural Bank of China and Bank of China Ltd (BOC) said in statements.

The reduction will come into effect on Sept. 25, they said.

China’s home loans totaled 38.6 trillion yuan ($5.3 trillion) at the end of June, representing 17% of banks’ total loan books.