The interest rate pricing method of the original contract is uniformly converted into the form of plus points based on LPR (plus points can be negative), as follows:
(1) The plus sign (which can be negative) is the difference between the latest execution interest rate of the original contract and the corresponding term LPR published in February 20 19.
(2) During the remaining period of the contract, the value of bonus points (which can be negative) is fixed.
(3) Equivalent conversion, that is, the interest rate level remains unchanged (excluding) from the batch conversion point to the first repricing date (interest rate adjustment date).
(4) On each repricing date, the loan interest rate level is calculated and determined by the corresponding term LPR on the day before repricing date and the added value determined during batch conversion.
(5) The re-pricing cycle is uniformly converted to 12 months.
Extended data:
The biggest difference between LPR mortgage interest rate and before is a "dynamic" and a "static". In the past, the mortgage interest rate was completely determined by the central bank's quotation. The central bank's quotation moved and the loan interest rate changed again. Personally, I think that from the perspective of reflecting the real use of market funds, the monthly LPR is much more timely than the quotation of the central bank.
Due to the bank's policy release, the future pricing formula will be "mandatory", that is, the monthly contribution will be calculated with reference to "LPR+ basis point". Among them, LPR is based on LPR on New Year's Day every year, and the basis point = interest rate in August this year-LPR at the end of last year, and this basis point will never change in future years.
Bank of China-Announcement on Converting the Pricing Benchmark of Individual Housing Loan with Floating Interest Rate into LPR in Batch