China Eases Mortgage Terms as Banks Begin Offering 40-Year Home Loans to New Borrowers

China's central bank and the National Financial Regulatory Administration jointly issued an opinion on August 28 to reform and improve real estate credit management, extending the maximum term for personal housing loans from 30 years to 40 years, with the exact tenor to be agreed between buyers and commercial banks. Jiemian News reported that several bank branch managers said new mortgage applicants can now apply for 40-year loans, while existing borrowers are still waiting for further notice. On September 1, Jiemian News found that some state-owned bank managers said existing borrowers may be able to extend their mortgage term to 40 years, but multiple bankers said there is still no clear guidance. ICBC customer service said existing loans will continue under the original contract, but borrowers can apply to extend the term through the lending branch; after internal review, the maximum term can be extended to 40 years. China Construction Bank said it will assess applications based on the reason for extension and repayment sources, while Agricultural Bank of China and Bank of China told customers to contact their lending branch for any adjustment. Bank staff said applicants generally need to meet age requirements, with one manager saying borrowers in their 30s can apply and that the borrower’s age plus loan tenor cannot exceed 80 years. Another manager said loans secured by land with a 70-year term can usually be extended to 40 years, while a 50-year land-use term may limit the mortgage to 38 years in some cases. One manager also said the lower monthly repayment under a 40-year loan could loosen income-proof requirements. In an example given by a bank manager, a 3.5 million yuan loan on a 5 million yuan home would cut monthly payments by about 2,220 yuan but raise total interest by 720,000 yuan if the term is extended from 30 years to 40 years.