China Considers $5.5T Mortgage Refinancing Plan, 80 Basis Points Cut in Two Phases

Sep 4, 2024, 08:31 AM

China is considering a significant policy shift that would allow homeowners to refinance up to $5.5 trillion in mortgages. This initiative aims to reduce borrowing costs for millions of families and boost consumption. The plan would enable homeowners to switch banks for cheaper loans and renegotiate terms before January, which is earlier than usual. Additionally, China is contemplating cutting mortgage rates by a total of 80 basis points in two phases to protect banks. The first reduction is expected in the coming weeks, with a second cut planned for early 2025. This move is part of a broader effort to address the country's real estate crisis and prevent mass defaults. Listed property stocks surged following the announcement.