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China Mortgage Guide 2025
Equal Principal vs Equal Installment
Equal Principal: Fixed principal + decreasing interest
→ Saves 10-15% total interest
→ Formula: Monthly principal = Total loan ÷ Term
Equal Installment: Fixed monthly payment
→ Lower initial payments
→ Formula: [P×r×(1+r)^n]÷[(1+r)^n-1]
→ Saves 10-15% total interest
→ Formula: Monthly principal = Total loan ÷ Term
Equal Installment: Fixed monthly payment
→ Lower initial payments
→ Formula: [P×r×(1+r)^n]÷[(1+r)^n-1]
2025 LPR Policy Update
Key changes:
1. Current 5-year LPR: 3.95% (Feb 2025 cut)
2. First-home rate: LPR -20bps (min 3.75%)
3. Second-home rate: LPR +20bps (min 4.15%)
4. Rate reset: Annually on Jan 1 or loan anniversary
Historic low: Down 1.65% from 2021 peak
1. Current 5-year LPR: 3.95% (Feb 2025 cut)
2. First-home rate: LPR -20bps (min 3.75%)
3. Second-home rate: LPR +20bps (min 4.15%)
4. Rate reset: Annually on Jan 1 or loan anniversary
Historic low: Down 1.65% from 2021 peak
Repayment Strategies
Smart saving tips:
1. Term reduction: Shorten term when prepaying
2. Biweekly payments: 26 half-payments/year
3. Rate conversion: Switch fixed to LPR
Data: 5-year prepayment saves 23% interest
1. Term reduction: Shorten term when prepaying
2. Biweekly payments: 26 half-payments/year
3. Rate conversion: Switch fixed to LPR
Data: 5-year prepayment saves 23% interest
Disclaimer
Results for reference only. Actual terms subject to bank approval.
