Chen Mo spent more than half a year doing the math in order to buy a house.
Chen Mo, 29, works as a technician at a manufacturing company in Optics Valley, Wuhan, with a monthly income of 6,500 yuan. My wife works as a salesperson in a shopping mall and earns 4,000 yuan a month. Their combined salary is 10,500 yuan, and their child is over one year old. What they are interested in is a 72-square-meter second-hand house in the core area of Optics Valley. It is relatively new and has a school district. The unit price is about 19,000 yuan/square meter, and the total price is 1.37 million yuan. The down payment requires 15%, totaling 206,000 yuan, which is the savings saved by the two. The remaining 1.164 million yuan requires a loan, which will be paid off in 30 years. The interest rate is 3.05%, and the monthly payment of equal principal and interest is about 4,940 yuan.
The monthly payment accounts for nearly half of their income. Adding in milk powder, rent, and alimony for the elderly on both sides, their wages will bottom out every month. Faced with this reality, Chen Mo hesitated for half a year. The agency urged him many times, but he did not dare to sign. On September 29, the Ministry of Finance, the People’s Bank of China, and the State Administration of Financial Supervision jointly issued the “Notice on Implementing the Interest Discount Policy for Residential Home Purchase Loans” (Caijin [2026] No. 95), clarifying that interest discounts on residential home purchase loans will be implemented from October 1. Chen Mo’s situation changed overnight.
On September 30, terms such as “Guaranteed subsidy for buying a house” and “Real estate is facing an epic move” became hot searches.
After seeing the introduction of the policy, Chen Mo decided not to hesitate anymore.
According to the newly introduced policy, the maximum loan size for which residents can enjoy discount interest for this round of house purchases is 1 million yuan. The financial department will provide an annual discount of 1 percentage point based on the loan principal, with a maximum term of 5 years. Based on a calculation of 1 million yuan, a 30-year term, and an interest rate of about 3%, the total interest savings in 5 years can be nearly 50,000 yuan.
Chen Mo calculated his loan amount of 1.164 million yuan and found that 1 million yuan would enjoy interest discounts. The excess 164,000 yuan would still be calculated based on the contract interest rate. He could receive an interest discount of approximately 10,000 yuan per year. His monthly payment dropped from 4,940 yuan to 4,110 yuan, a drop of about 17%, and the proportion of his family’s monthly income dropped from 47% to 39%.
For a family like Chen Mo, the significance of this money is not just the size of the money: the accounts that were originally bottoming out every month are now freed up to breathe, and contracts that they were afraid to sign can now be negotiated.
How strong is this policy? Yan Yuejin, deputy director of the Shanghai E-House Real Estate Research Institute, calculated that in the past, local governments’ home purchase subsidies ranged from 10,000 to 30,000 yuan. This time, the government’s interest discount is up to 50,000 yuan, which is obviously greater. And the funds are mainly borne by the central government, which helps alleviate the pressure on local financial support.
However, the threshold is very strict, mainly to meet the home-purchasing needs of the urgently needed groups. The conditions that home buyers must meet at the same time are that they use the newly issued commercial personal housing loans to purchase their first home, the building area of the purchased home does not exceed 120 square meters, and the purchase price does not exceed 1.5 million yuan. For those who use provident fund loans to buy houses and those who use loans to buy affordable housing, the state has relevant policy support, and this time there will be no overlapping benefits. In addition, the policy will be implemented on October 1, 2026, and the implementation period is tentatively scheduled for one year.
This means that only loans issued during this year can be enjoyed, but those obtained can be used for five years. “Yicai Global” quoted relevant departments as saying that during this year, all eligible households can enjoy it, and there is no upper limit on the total size of the funds. The settlement should be based on the actual situation, and all subsidies should be paid. There is no need to worry about “first come, first served, while supplies last.”
The same 1.5 million yuan, the same 120 square meters, placed in different cities, will measure a completely different life. The algorithm for this line is very simple. 1.5 million yuan divided by 120 square meters equals 12,500 yuan/square meter. This is the ceiling of the unit price when 120 square meters is purchased.
“Financial World” found that in third- and fourth-tier cities like Xiaogan, Hubei, the average price of new houses is about 5,439 yuan/square meter, and buying a full 120 square meters only costs about 650,000 yuan. Even if it is calculated at 6,120 yuan/square meter in the core of the main city of Xiaonan, it is still 730,000 yuan, which is still far from the 1.5 million yuan threshold. The policy is almost open.
▲Picture source/”Financial World”
In Wuhan, the 12,500 yuan line is stuck between the main city and the distant city. The average price of second-hand houses in Wuchang District is 16,174 yuan/square meter, and that of East Lake High-tech is 13,781 yuan/square meter. They are all online. If you buy a house of 120 square meters, it will definitely exceed the standard. In distant urban areas such as Huangpi and Jiangxia, housing prices are significantly lower than this line. You can buy a three-bedroom apartment with just over 1 million yuan, which is firmly within the online price range.
Groups with basic needs can easily settle down in big cities. Yan Yuejin said that there are currently a large number of cost-effective small second-hand houses in big cities, and the total price has fallen into the 1.5 million yuan range. The set that Chen Mo is interested in is an example.
In actual operations, Yan Yuejin mentioned that for some houses with a total price of slightly more than 1.5 million yuan, in order to facilitate the transaction, the landlord will probably take the initiative to make a small price concession so that the buyer can get the interest discount. This will bring about a chain reaction, and transactions in the entire real estate market are expected to be revitalized.
In answering reporters’ questions, the three departments pointed out that this interest discount “focuses on the urgent needs of the first home” and will help families who are “preparing to buy the most ordinary house”, and the overall plan is to “protect the basics.” While it opened the door that was just needed, it also closed the other two doors. The opening for improvement demand has basically been blocked: the area usually exceeds 120 square meters, the total price exceeds 1.5 million yuan, and most of them are two units, and the three thresholds are almost impossible to reach. Needless to say for real estate speculators, the policy only recognizes first-time homes and only those that are needed for self-occupation. The area is limited and the total price is limited. In addition, the implementation period is only one year, so there is no room for arbitrage.
Yan Yuejin believes that the policy and the marketing nodes of the Golden Nine and Silver Ten will have a positive effect on active housing sales. Among them, the driving effect on the demand for first-time homes, the circulation of small second-hand houses in big cities, and overall housing consumption deserves continued attention.
For those in urgent need like Chen Mo, the one-year implementation period itself is a countdown. With a clear window period, decision-making will naturally speed up. Those who originally planned to wait and see for a while now have to plan ahead.
According to the “Daily Economic News” report, the China Index Research Institute said that it is expected that this policy will be more beneficial to the second-tier, third-tier, and fourth-tier new housing markets, and projects that are in urgent need will benefit more.
On September 29, 84 stocks in the real estate sector rose and only 3 stocks fell. Among them, Cinda Real Estate, Huafa Group, Binjiang Group, Shenzhen Property A, Vanke A, and Hualian Holdings rose by the daily limit, Special Services rose by more than 13%, Greenland Holdings rose by more than 6%, Gemdale Group, and Joy City rose by more than 6%.
The market is very lively, but you still have to settle the accounts yourself. For those who want to get on board, there are a few things to keep in mind. A senior real estate agent told Caijingtianxia that there is no need to do errands in person to get interest discounts. The Ministry of Finance clarified that the handling bank will automatically deduct the corresponding interest discount amount when collecting monthly interest, realizing “enjoyment without application” and notifying it through SMS or App. There is no need to apply additionally or go through any intermediaries.
“What you need to focus on is the loan, not the online signing. The policy will be implemented on October 1st and is tentatively scheduled for one year. Only loans that are completed during this year can be enjoyed.” The real estate agent reminded.
(The character Chen Mo in the article is a pseudonym)
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