This article was originally published on the WeChat public account Interface News, written by He Liuying. The cover image was AI-generated.
On August 28, the People's Bank of China and the National Financial Regulatory Administration jointly issued the 'Opinions on Reforming and Improving Real Estate Credit Management and Promoting the Accelerated Construction of a New Model for Real Estate Development.' According to the document, the maximum term for individual housing loans has been extended from 30 years to 40 years, with the specific term to be negotiated between the homebuyer and the commercial bank.
Interface News reporters recently conducted online consultations and in-person visits to assess the implementation of the new policy. Multiple bank relationship managers said they support new customers applying for 40-year mortgages, while existing customers will need to wait for further notice.
Can new customers now apply for 40-year mortgages?
Relationship managers at several state-owned and joint-stock banks confirmed to Interface News that new mortgage customers can now apply for 40-year home loans.
'Our system is currently being adjusted, and an official notice will be issued later. At that point, the mortgage process can proceed. If customers need to sign loan documents in advance, we can accept the application first. Once the specific document is finalized, we can submit it to the system,' a relationship manager at a joint-stock bank, identified by the pseudonym Shen Hao, told Interface News.
'The policy for new applications has already been issued, and it is highly likely that new customers can apply,' a lobby staff member at a state-owned bank told Interface News.
However, a relationship manager at another joint-stock bank told Interface News that it is still uncertain and specific details require waiting for the implementation rules.
Can existing mortgage customers adjust their loans to a 40-year term?
On Sept. 1, during in-person visits by Jiemian reporters, a client manager at a state-owned bank said the bank supports existing customers in extending their mortgage term to 40 years, and advised contacting their designated client manager for details.
However, several other bank client managers told Jiemian that specific guidelines for adjusting existing customers' mortgages have yet to be issued, and they are waiting for official notice.
On Aug. 31, Jiemian reporters called the four major state-owned banks to inquire. ICBC's customer service said existing mortgages would continue to follow original contracts and rules, with no proactive adjustments by the bank. However, if customers want to extend the term, they can contact the lending branch and submit an application. The bank will negotiate and determine a maximum term based on the reason for extension and the customer's future repayment sources and plans. Under the new rules, the bank will conduct an internal review, and upon approval, the mortgage term can be extended up to 40 years.
China Construction Bank's customer service told Jiemian that if a customer applies to extend the loan term, the bank will consider the reason for the extension and repayment sources before determining the specific number of years. Customers can contact their client manager or lending branch for details.
Agricultural Bank of China and Bank of China customer service also told Jiemian that customers seeking to adjust their loans should contact their specific lending branch.
A CCB mortgage customer separately told Jiemian that they can now access a "repayment plan adjustment intention registration" feature via the bank's app and select "extend loan term."
What are the requirements for applying for a 40-year mortgage?
First, age. A client manager at a state-owned bank told Jiemian News, "If you want to apply for a 40-year mortgage, we have age requirements; being in your 30s is acceptable." The manager did not specify the exact age limit.
Shen Hao and another client manager both told Jiemian News, "The borrower's age plus the loan term cannot exceed 80 years."
Another client manager said, "Previously we generally required a direct relative to guarantee the loan if the maturity date exceeded age 75. Now we support 40-year mortgages, but whether these age and guarantee requirements have changed is still being discussed with our superiors; nothing has been specified yet."
On land use rights, a client manager at a joint-stock bank told Jiemian News, "With a normal 70-year land term, you can apply for a 40-year loan. But some land has only a 50-year term, and if the developer held it for 12 years before selling, then you can only borrow for 38 years. Such cases are relatively rare."
Additionally, if it involves a provident fund loan, can one apply for 40 years? One client manager said, "We are also confirming with head office; there is no latest response yet."
As for the application process, Shen Hao said it is the same as a normal mortgage process, and because monthly payments are lower, requirements such as income proof will be relaxed.
How much will monthly payments decrease? How much will interest increase?
Shen Hao calculated two scenarios for Jiemian News, using a house price of 5 million yuan, a 30% down payment of 1.5 million yuan, a loan of 3.5 million yuan, and simple equal principal and interest calculations.
For a 30-year loan, the monthly payment is about 14,850 yuan and total interest is about 1.84 million yuan; for a 40-year loan, the monthly payment is about 12,630 yuan and total interest is about 2.56 million yuan. That means the monthly payment falls by 2,220 yuan while total interest rises by 720,000 yuan.
Wang Jiao (pseudonym), who recently applied for a 540,000-yuan mortgage, also ran the numbers for a Jiemian News reporter.
For a 540,000-yuan loan with equal principal and interest payments, a 30-year term would require monthly payments of 2,276.66 yuan and total interest of 279,600 yuan; a 40-year term would require monthly payments of 1,933.12 yuan and total interest of 387,900 yuan. That means the monthly payment drops by 343 yuan while interest costs rise by 108,300 yuan.
Source: Photo provided by interviewee
Source: Photo provided by interviewee
"I'm saving money now, hoping to make a lump-sum payment of tens of thousands of yuan to shorten the repayment period. I want to pay off the loan as soon as possible while I'm young. Extending the loan term doesn't seem worthwhile," Wang Jiao said.