China Offers Subsidies on Some Residential Mortgages

China will offer subsidies on interest costs for eligible first-home mortgages as Beijing attempts to revive home sales and turn around the years-long slump in the property sector.

The government from Oct. 1 will provide 1-percentage-point subsidies on rates for first home buyers who apply for mortgage loans smaller than 1 million yuan, equivalent to $140,000, according to a joint statement Tuesday from the People's Bank of China, the finance ministry and the country's financial regulator.

The subsidy will be eligible for buyers who plan to purchase apartments no larger than 120 square meters and valued less than 1.5 million yuan. The policy will initially run for one year, and individual loans can receive the subsidies for up to five years.

At current first-home mortgage rates, the subsidy is equivalent to a roughly a one-third reduction in borrowing costs, said the PBOC.

The policy is expected to provide greater support to home sales in smaller cities, where housing prices are generally lower and oversupply is more pronounced.

Meanwhile, China's central bank also said it would cut interest rates for one of its monetary instruments frequently used for government-backed infrastructure projects. Interest rates for the PBOC's pledged supplementary lending will be lowered by 0.25 percentage points to 1.5%, in a bid to better support the real economy, said the PBOC.

It also expanded the use of the PSL, and it can now fund construction of six types of infrastructure, including water networks, new power grids, computing-power networks, next-generation communications networks, underground urban pipelines and logistics networks.

The central bank will increase its relending quota for technological innovation and equipment upgrades by 200 billion yuan to 1.4 trillion yuan. It will also increase the relending quota for agriculture and small businesses by 500 billion yuan to 4.85 trillion yuan, including a 300 billion yuan increase in the quota for private companies.

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(END) Dow Jones Newswires

September 29, 2026 07:14 ET (11:14 GMT)