Interest rate policy on housing loans on the mainland to change from Oct 8

BEIJING - China's housing market is expected to make a smooth transition toward the use of the loan prime rate, or LPR, as the new benchmark for setting the interest rate on newly issued commercial individual housing loans.

Beginning Oct 8, the loan benchmark interest rate in use will be replaced by the LPR as the central bank seeks to set its interest rate for commercial individual housing loans in a more market-based manner.

New mortgage rates for first-home purchases should not be lower than the related LPRs, while those for second-time buyers should be at least 60 basis points higher than the LPRs, said the People's Bank of China.