On October 1, 2026, the new nationwide home purchase loan interest subsidy policy officially took effect.

This marks the first time in the history of the central government's finances that interest subsidies are being directly applied to residents' commercial housing loans.

Coinciding with the National Day Golden Week home-viewing peak season, the policy immediately sparked promotional posters across major sales offices and real estate agencies.

Many first-time buyers, upon seeing "1% interest subsidy, save up to 50,000 yuan," began to wonder: is now the time to get on board?

But the greater the policy benefit, the more easily it can be simplified and exaggerated by salespeople.

Many property consultants only talk about the savings without mentioning the eligibility thresholds; they only mention lower monthly payments in the first five years while staying silent about the interest rate returning to its original level after five years.

Today we break down the original policy text, calculate the real benefits, clarify the eligibility boundaries, and tell you who can enjoy the subsidy, who cannot get this money no matter how tempted they are, and several major pitfalls that first-time buyers must guard against.

On September 29, the Ministry of Finance, the People's Bank of China, and the National Financial Regulatory Administration jointly issued a notice stating that starting October 1, a nationwide interest subsidy policy for resident home purchase loans would be implemented.

The policy is tentatively set to run for one year and applies only to newly issued qualifying mortgages within that period.

The subsidy standard is 1 percentage point on an annualized basis, with a maximum subsidy period of five years and a per-household subsidized loan cap of 1 million yuan.

At the maximum, a household can save approximately 50,000 yuan in interest.

Let us first clarify the core calculation so you can understand exactly how large this benefit is.

Suppose a buyer takes out a 1 million yuan commercial loan with a 30-year equal installment repayment plan, and the original first-home commercial loan rate is 3%.

Without the subsidy, the annual interest payable would be 30,000 yuan; with the 1% subsidy, the government subsidizes 10,000 yuan per year, meaning the buyer's effective interest rate in the first five years is equivalent to 2%.

The cumulative subsidy over five years totals approximately 50,000 yuan, averaging 10,000 yuan saved per year, which translates to a monthly payment reduction of roughly 800 yuan.

There is a key point that is very easily confused here: the interest subsidy does not mean the bank lowers the contract interest rate.

Your loan contract rate remains unchanged; the government separately subsidizes 1% of the interest, the bank still collects interest at the contract rate, and the subsidy funds are borne by the government and automatically offset after disbursement — no need for the buyer to submit materials or apply separately.

When processing the mortgage, you simply need to authorize the bank to handle the subsidy procedures on your behalf at the same time; there is no need to visit the finance department at all, which is a highlight of the simplified process in this policy.

Funding is borne 90% by the central government and 10% by local governments, with a unified national standard that does not distinguish between first-tier, second-tier, or third-tier cities.

Many people see "1% interest subsidy" and assume it is a universal benefit.

In fact, to receive this subsidy, four mandatory conditions must all be met simultaneously — none can be missing.

If any one of them is not satisfied, you directly lose eligibility for the subsidy.

First, it must be a newly issued commercial individual housing loan after October 1, for the purchase of a first home.

The determination of "first home" follows the current standards of each locality, and both new homes and second-hand homes are included.

The key exclusion is existing mortgages: old mortgages already disbursed before October 1, even if they are first-home loans, cannot enjoy the subsidy; nor is it permitted to use a new loan to replace an existing mortgage — a simple refinancing cannot qualify for the subsidy.

Provident fund loans are not within the scope of the subsidy, and affordable housing loans have separate supporting policies that cannot be combined with this subsidy.

Second, the property's gross floor area must be ≤120 square meters.

This is based on the gross floor area registered in the property certificate and the online signing contract, not the interior floor area.

Even 120.01 square meters does not qualify.

Many first-time buyer families easily confuse interior area with gross floor area when viewing properties, so be sure to verify the registered area of the property in advance and do not trust verbal estimates from salespeople.

Third, the total transaction price of the property must not exceed 1.5 million yuan.

This includes the total home price, not the down payment amount.

This condition directly excludes most improvement-oriented properties in first-tier and strong second-tier cities.

In cities with higher housing prices, a total price of 1.5 million yuan can only buy small units in far suburbs; core urban first-time buyer projects basically exceed the price cap and cannot enjoy the subsidy.

Fourth, the subsidized loan principal is capped at 1 million yuan.

Even if the property's total price is 1.5 million yuan with a 500,000 yuan down payment, the loan would be exactly 1 million yuan, qualifying for the full subsidy; if the loan is 1.2 million yuan, then only the 1 million yuan principal portion enjoys the 1% subsidy, and the extra 200,000 yuan of loan principal receives no subsidy at all.

To summarize simply: first home, newly issued commercial loan, gross floor area ≤120 square meters, total price ≤1.5 million yuan, loan capped at 1 million yuan — all four conditions must be met simultaneously to receive the maximum five-year, 1% annualized subsidy.

Next, let us focus on answering what everyone cares about most: who cannot receive it?

This is also the part that sales offices are most likely to deliberately conceal.

Buyers of second or multiple homes, regardless of area or total price, are categorically ineligible for the subsidy.

The policy is positioned to support first-time self-occupancy buyers, not improvement or replacement demand.

If the total property price exceeds 1.5 million yuan, or the gross floor area exceeds 120 square meters, you are directly excluded.

Even if you are short by just a few tens of thousands of yuan or one or two square meters, you cannot apply.

Provident fund loans and combined provident fund plus commercial loans are all ineligible; only pure commercial mortgage loans qualify.

Existing first-home mortgages disbursed before October 1, regardless of their current interest rate, receive no subsidy.

Loans used to replace existing mortgages fall under existing loan replacement and are not covered by the policy.

The policy is tentatively valid for one year.

That is to say, the loan must be disbursed within the policy execution period; merely paying a deposit or signing a purchase contract, with loan disbursement falling outside the policy window, also means no subsidy.

From the perspective of policy positioning, this interest subsidy is a typical structural policy of targeted support for first-time buyers, not a broad, flood-style stimulus.

From the outset, the policy was designed for ordinary families with limited budgets, first-time home purchases, and small-to-medium-sized, low-total-price housing, with the aim of reducing short-term monthly payment pressure for first-time buyer families and helping those with genuine housing needs get on board — by no means to drive a broad rise in housing prices.

The policy's implementation coincides with the National Day Golden Week, and market divergence is already evident.

In Chongqing, Changsha, and some third- and fourth-tier cities, first-time buyer properties under 1.5 million yuan total price and under 120 square meters have seen significantly increased viewing and inquiry volumes, with many sales offices using the interest subsidy as their core marketing selling point.

However, for large improvement units and high-priced projects in core urban areas, although visitor numbers have increased, actual transactions remain cautious; in far-suburb areas with continuous population outflow, even with the subsidy stacked on top, the market remains quiet — the K-shaped divergence pattern in the housing market has not changed.

Here is a reminder to all first-time buyers preparing to view properties: do not fall into three common misconceptions and avoid being misled by marketing rhetoric into making wrong purchasing decisions.

The first misconception: saving 50,000 yuan on interest is the same as a 50,000 yuan price cut.

Many salespeople will directly advertise it this way, but always remember: the subsidy only lasts five years; after five years, the government subsidy ends, and your monthly payment returns to the original contract rate.

If you only look at the lower monthly payment pressure in the first five years and ignore the repayment pressure after five years, blindly increasing leverage, you may easily face cash flow strain in the future.

The 50,000 yuan is a five-year interest reduction, not a permanent discount on the home price — you cannot evaluate the subsidy as if it were a price drop.

The second misconception: as long as you meet the subsidy conditions, you can buy with your eyes closed.

The subsidy addresses the issue of interest costs, but it cannot solve the risk of unfinished projects.

The top priority in buying a home is always delivery safety.

Prioritize completed properties or projects whose main structure has already topped out and whose fund supervision is well-regulated.

The few tens of thousands saved from the subsidy is nothing compared to a stalled project and the loss of your down payment.

The new August 28 policy on completed-home sales is being implemented across various regions; prioritize completed or near-completed homes, and do not choose projects with weak financial strength and questionable delivery just to enjoy the subsidy.

The third misconception: the subsidy is here, so housing prices are about to surge.

This is the most common exaggerated rhetoric from self-media and sales offices.

The policy is about precise burden reduction and targeted support for first-time buyers; it does not change the fundamentals of the housing market.

Inventory levels remain high in most cities nationwide, population inflows are diverging, and there is no basis for across-the-board price increases.

Do not buy with an investment-appreciation mindset just because of short-term policy stimulus; self-occupancy first-time buyers can evaluate their own income and debt and enter cautiously; for investment purchases, high-leverage entry is still not recommended.

Here is a practical step-by-step verification checklist for first-time buyers to go through item by item before signing:

Step one: check the online-signed registered total price and gross floor area of the property, confirming total price ≤1.5 million yuan and gross floor area ≤120 square meters.

Step two: confirm the household's first-home eligibility by consulting the local real estate registration center and the lending bank in advance.

Step three: confirm that you are processing a pure commercial mortgage, not a provident fund or combined loan.

Step four: confirm the disbursement timeline with the bank to ensure the loan is disbursed within the policy execution period.

Step five: calculate the full 30-year repayment cash flow, separately computing the monthly payment during the five-year subsidy period and after the rate reverts after five years, confirming that household income can cover the monthly payment over the long term.

Step six: focus on verifying the project's fund supervision, construction progress, and delivery timeline; prioritize completed homes.

From an industry macro perspective, this interest subsidy policy is an important step in demand-side support.

Over the past two years, real estate policies have focused more on the supply side — ensuring delivery and resolving developers' debt risks; this time, however, the central government is directly providing interest subsidies on residents' mortgages, delivering the benefit directly to buyers themselves and lowering the short-term financial threshold for first-time home purchases.

But the policy has clear boundaries: it can only improve short-term monthly payment pressure and cannot reverse regional fundamentals.

For core urban first-time buyer areas in cities with continuous population inflows and solid industries, the policy will activate some wait-and-see first-time buyers; for far-suburb counties with population outflow and high inventory, even with the subsidy stacked on top, it will be difficult to change long-term inventory clearance pressure.

In conclusion, this first-home mortgage interest subsidy effective from October is a tangible benefit for qualifying first-time buyer families — with a maximum loan of 1 million yuan, saving up to 50,000 yuan in interest over five years.

But the eligibility threshold is clear, and it is not available to everyone.

Home purchase decisions should never be driven by a single policy benefit alone.

If you meet all conditions, have stable self-occupancy needs, sufficient cash flow, and the project's delivery is safe, you can rationally evaluate getting on board; but if your income is unstable, the property has delivery risks, or you simply want to bet on price increases, it is advisable to continue waiting even if you can receive the subsidy.

The housing market has bid farewell to the era of broad price increases; policy benefits are a bonus, not the core reason to buy.