Ministry of Finance, People's Bank of China, and National Financial Regulatory Administration jointly issue notice on implementing residential mortgage interest subsidy policy.

The policy, effective from October 1, 2026, with a provisional implementation period of one year, provides central government interest subsidies for eligible first-home commercial mortgage loans newly issued by participating banks during the period.

Under the policy, qualified resident families purchasing commodity housing with loans meeting specific conditions can receive central government interest subsidy support. The subsidy is calculated at an annualized rate of 1 percentage point on the loan principal, for a maximum period of 5 years, with a per-household cap of 1 million yuan on the loan amount eligible for subsidy.

Subsidy funds are shared between the central government and local governments at a ratio of 90% and 10% respectively, with provincial-level and below fiscal sharing proportions to be determined independently by provincial finance departments based on local conditions.

Eligibility criteria for the interest subsidy are clearly defined.

Eligible families must simultaneously meet the following conditions: first, using newly issued commercial personal housing loans to purchase first homes, excluding replacement of existing loans with new commercial personal housing loans; second, the purchased housing must have a building area of 120 square meters or less; third, the purchased housing price must be 1.5 million yuan or less.

All banks conducting commercial personal housing loan business are permitted to handle the residential mortgage interest subsidy business in accordance with policy provisions.

Fund management follows a "pre-allocation plus settlement" mechanism.

Provincial finance departments establish a "province-to-province" working mechanism with provincial branches of national banks, head offices of local legal person banks, head offices of private banks, and domestic headquarters of foreign banks, streamlining the workflow for efficient pre-allocation, review, settlement, and liquidation of subsidy funds.

For banks without provincial branches, their head offices coordinate with the provincial finance department at their place of registration.

Operational procedures require participating banks to submit subsidy fund applications.

Provincial branches of participating banks must submit applications for current-year subsidy funds to local provincial finance departments within the first month after policy introduction and before the end of January each year. Provincial finance departments aggregate these applications and report to the Ministry of Finance within the second month after policy introduction and before the end of February each year.

The Ministry of Finance pre-allocates central government subsidy funds to provincial finance departments based on annual budget arrangements, while provincial finance departments organize local subsidy fund guarantees. Subsidy funds are settled between the Ministry of Finance and provincial finance departments, and between provincial finance departments and participating bank provincial branches, based on policy implementation progress. After the subsidy period expires, finance departments and participating banks conduct final liquidation of subsidy funds.

Participating banks bear primary responsibility for implementation.

Banks must conduct subsidy eligibility reviews based on online contract filing and housing purchase contracts, strictly perform loan review duties, handle entrusted payment of loan funds, classification statistics, and data monitoring, establish reporting and statistical systems, submit monthly reports on loan issuance and subsidy fund usage to the Ministry of Finance and provincial finance departments with copies to the People's Bank of China and the National Financial Regulatory Administration.

When signing loan contracts, banks must inform borrowers of subsidy ratio, subsidy period, subsidy amount, and other elements in an appropriate manner to ensure borrowers understand the policy content. When collecting monthly interest, banks automatically deduct the corresponding subsidy amount, achieving "enjoyment without application," and inform borrowers of their policy benefits through SMS, APP messages, and other means.

Coordinated efforts across multiple parties are strengthened.

The Ministry of Finance leads organizational implementation, manages budgets, and strengthens supervision of fund usage. Financial management departments perform real estate credit management according to their responsibilities, guiding and urging participating banks to conduct loan issuance and subsidy work in compliance with laws and regulations. Provincial branches of the People's Bank of China share relevant policy implementation information with provincial finance departments, strengthening coordination between monetary policy and fiscal policy.

Joint supervision is reinforced.

The Ministry of Finance, together with the National Financial Regulatory Administration, organizes joint spot checks by local regulatory bureaus of the Ministry of Finance and local offices of the National Financial Regulatory Administration. If fraudulent acquisition or骗取 of subsidy funds through irregular operations is discovered, subsidy funds will be recovered. Banks found colluding with customers in irregular operations will be strictly held accountable, and in serious cases, will be prohibited from continuing to handle related subsidy business.

Background and significance of the policy.

Housing issues affect people's livelihoods, and the Party Central Committee and State Council have consistently prioritized them, issuing clear requirements on resident housing work multiple times in recent years. The Ministry of Finance, together with relevant parties, has implemented a combination of supply-side measures, including supporting the issuance of new special bonds for land reserves and supporting local governments in purchasing existing commercial housing for use as affordable housing, to improve supply and benefit the people.

This marks the first time the central government has provided interest subsidies for commercial personal housing loans to relatively lower-income groups, further opening policy space on the demand side. By strengthening fiscal and financial coordination, leveraging fiscal guidance, financial amplification, and market operation mechanisms, the policy better supports and unlocks rigid housing demand from urban and rural residents, genuinely helping migrant workers, newly employed university graduates, and urban salaried families reduce costs and burdens, enabling more people to have a place to live.

Based on in-depth research, the Ministry of Finance, together with the People's Bank of China and the National Financial Regulatory Administration, formed the policy plan.

Main content of the policy.

The central government's residential mortgage interest subsidy policy represents an exploration of ways to guarantee and improve people's livelihoods in the housing sector. By defining housing total price, housing area, loan category, and other parameters, it aims to precisely benefit target groups, helping relatively lower-income families planning to buy the most ordinary housing "reduce their monthly mortgage payments."

First, the policy focuses on first-home rigid demand, prioritizing support for ordinary families newly purchasing small-to-medium-sized, lower-priced housing. It primarily uses limited fiscal funds to benefit more rigid-demand groups universally. Eligible resident families must simultaneously meet these conditions: first, using newly issued commercial personal housing loans to purchase first homes, excluding replacement of existing loans. The determination of "first home" follows current policy and includes both new and second-hand homes. Second, purchased housing must have a building area of 120 square meters or less. Third, purchased housing price must be 1.5 million yuan or less.

These conditions focus on supporting basic housing needs of rigid-demand groups. Considering variations in resident income, housing area, price levels across different cities, the central level balances livelihood protection, basic guarantees, broad coverage, fairness promotion, and fiscal capacity to achieve nationwide balance. For groups using loans to purchase affordable housing or using provident fund loans, existing national policies already provide support, and this policy does not stack with those benefits.

Second, the 1 percentage point interest subsidy reduces residents' mortgage interest costs. The maximum loan amount eligible for subsidy is 1 million yuan. Finance departments provide an annualized 1 percentage point subsidy. Based on current first-home commercial personal housing loan interest rate levels, this is equivalent to a one-third discount on the interest rate, with a maximum subsidy period of 5 years.

For example, for a long-term 1 million yuan commercial personal housing loan, considering most mortgages have monthly interest payments with gradually decreasing loan balances, the subsidy policy can help borrowers reduce cumulative interest payments by nearly 50,000 yuan at most. The specific subsidy amount varies depending on loan scale, term, repayment method, and other factors.

Third, subsidies are provided to all eligible applicants with full fiscal guarantee. The policy starts on October 1 of this year, with a provisional implementation period of 1 year. During this period, all eligible resident families can enjoy fiscal interest subsidy support. There is no upper limit on total fund scale during implementation, budgets have been fully arranged, and settlement is based on actual amounts.

Implementation arrangements.

Interest subsidy is an important fiscal-financial coordination policy tool. In recent years, we have guided local governments and financial institutions to continuously explore and optimize, improving horizontal coordination and vertical connectivity mechanisms, and constantly enhancing policy operational convenience. The implementation of the residential mortgage interest subsidy policy focuses on the following aspects:

First, full coverage of participating banks facilitates "nearby application" for loans. Considering the wide distribution of commercial personal housing loan business, to facilitate residents applying for loans and enjoying benefits nearby, all banks conducting commercial personal housing loan business can handle residential mortgage interest subsidy business according to regulations.

Second, automatic subsidy delivery lets people "enjoy with peace of mind." Homebuyers follow normal credit procedures at banks for loans and simply authorize the bank to handle the subsidy on their behalf when signing loan contracts. Banks automatically identify eligible borrowers and automatically calculate and deduct corresponding subsidy amounts when collecting monthly interest. Borrowers repaying normally will see subsidy benefits directly reflected in each period's repayment amount. Banks will inform borrowers of subsidy benefits through SMS, APP messages, and other means in a timely manner, keeping borrowers informed.

Third, streamlined management chains enable "efficient processing." While residents enjoy convenience, organizational implementation must be smooth. Banks already possess information on first-home determination, housing area, total housing price, and loan amount during loan approval. To simplify operational procedures, this policy clarifies that participating banks are responsible for reviewing subsidy eligibility, with relevant departments organizing joint spot checks as appropriate.

Finance departments lead organizational implementation, strengthen coordination with participating banks, and ensure subsidy fund guarantees. The People's Bank of China and the National Financial Regulatory Administration perform real estate credit management according to their responsibilities, strengthen coordination between monetary policy and fiscal policy, and guide and urge participating banks to conduct loan issuance and subsidy work properly.

Next, we will closely track policy implementation progress, strive for the simplest operations and minimal inconvenience for the public, promote full release of policy effects, and ensure the public benefits as early as possible.