China expands mortgage subsidies to ease homebuying costs

China will implement interest subsidies for housing loans starting October 1, 2026, offering eligible first-time homebuyers an annual subsidy of 1 percentage point on commercial mortgage interest, with a tentative implementation period of one year.

The policy, jointly announced on Tuesday by the Ministry of Finance, the People's Bank of China and the National Financial Regulatory Administration, applies to first homes priced at no more than 1.5 million yuan (about $223,768) and measuring up to 120 square meters. Eligible mortgages are capped at 1 million yuan, with the subsidy available for up to five years.

For a 1-million-yuan long-term mortgage, the subsidies could cut total interest payments by nearly 50,000 yuan, officials said. Actual savings will vary depending on the loan amount, maturity and repayment method. Based on current mortgage rates, the 1-percentage-point subsidy is roughly equivalent to a one-third reduction in the applicable interest rate.

The nationwide rollout follows a State Council executive meeting on September 28, which called for policies and measures to stabilize the real estate market.

Similar measures had previously been introduced in a number of cities. The nationwide policy extends the approach to eligible buyers across the country, including first-time buyers and those seeking improved housing.

(Cover via VCG)