Falling property prices have dragged the economy into crisis, and the Chinese government's plan will allow homeowners to switch banks for cheaper loans. About this reported the Bloomberg.
China is considering allowing homeowners to refinance up to $5,4 trillion in mortgage loans to lower borrowing costs for millions of families and boost consumption.
It is noted that the crisis in the real estate market, which has been going on for the fourth year, has affected everything from the labor market to consumption and the well-being of households.
Under the plan, homeowners will be able to renegotiate terms with their current lenders until January, when banks typically reprice mortgages. According to the interlocutors, they will also be allowed to refinance at another bank for the first time since the global financial crisis.
While lower mortgage rates will hurt the profitability of China's state-owned banks, the authorities are under renewed pressure to stem a housing-related slowdown in Asia's biggest economy.
Shujin Chen, a China economist at Jefferies Financial Group, is reported to have estimated that the refinancing could lower existing mortgage rates by a maximum of 1 percentage point, saving homeowners about 300 billion yuan ($42 billion).
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