China Extends Mortgage Terms to 40 Years as Banks Begin Implementation

China's central bank and the National Financial Regulatory Administration issued a notice on August 28 that extends the maximum term for personal housing loans from 30 years to 40 years, and some banks have already begun accepting new 40-year mortgage applications, according to Jiemian News. Industrial and Commercial Bank of China, China Construction Bank and Bank of Communications have said they are implementing the new policy, but the actual term depends on factors such as the borrower’s age, the property’s age and structure, and bank approval. In Beijing, some banks require the borrower’s age plus the loan term to stay below 70 or 75 years, meaning only younger buyers may qualify for the full 40 years. For second-hand homes, older properties may face shorter terms or be ineligible, and one state-owned bank loan manager said the usual mortgage term is the lower of 75 minus the borrower’s age or the property’s age. A China Construction Bank post-loan manager said provident fund loans are not yet included in the extension process. The same August 28 notice also allows eligible existing mortgages to renegotiate repayment plans, with any extension capped at half of the original term and the total original term plus extension limited to 40 years. Banks and regions are moving at different speeds: some branches are already accepting applications, while others are still awaiting detailed rules. For a 1 million yuan mortgage at a 3.05% first-home commercial rate, Jiemian News calculated that a 30-year equal-principal-and-interest loan would have monthly payments of about 4,243 yuan and total interest of about 527,500 yuan, while a 40-year loan would cut monthly payments to about 3,609 yuan but raise total interest to about 732,200 yuan.