CITIC Securities: There is a possibility of lower interest rates on existing mortgage loans, but it is expected that more decisions will be made independently by commercial banks

CITIC Securities issued a report saying that the interest rates of new personal housing mortgage loans in China continued to decline, and the spread between existing and new loans continued to expand. The central bank stated that it supports and encourages commercial banks to independently negotiate with borrowers to change the contract agreement, or to replace the original stock loans with new loans. Although lower the stock mortgage interest rate will help reduce the debt of residents and stimulate consumption, it also faces the challenges of bank interest rate spreads and the implementation of policies. We believe that the existing mortgage loan interest rate may be lowered, but it is expected that more decisions will be made by commercial banks independently. If the existing mortgage interest rate is adjusted, the design of the plan will be more flexible and precise. The central bank and other departments may adopt certain incentive measures to hedge the negative impact of a decrease in interest income of commercial banks.