On September 29, China’s Ministry of Finance, the central bank and the financial regulatory authority jointly unveiled a national mortgage interest subsidy policy for residential housing, the first of its kind launched by the central government. The new policy will take effect on October 1 with a tentative one-year implementation period. Targeting rigid housing demand exclusively, the regulation adheres to a prudent market stance, prioritizing supporting homebuyers rather than overheating the real estate sector.

Under the detailed rules, the subsidy only applies to newly issued commercial mortgages for first homes, limited to properties with a floor area below 120 square meters and a total value under 1.5 million yuan. Existing mortgages and second homes are excluded from the preferential scheme. Industry analysts point out that the policy precisely addresses the pain points of rigid home purchases, greatly benefiting first-time buyers in second and third-tier cities. It effectively reduces monthly mortgage burdens and boosts market willingness to enter the property market.

Different from previous universal policies such as down payment and interest rate cuts, the new subsidy is a targeted fiscal incentive that coordinates fiscal and financial tools to stabilize the rigid housing market and curb speculative hype. Combined with the central bank’s increased financial support and re-loan quota expansion ahead of the National Day holiday, a full policy package for property market stabilization has taken shape. In the short term, housing transaction activity driven by rigid demand is expected to rise steadily in the fourth quarter, sustaining a moderate market recovery with no easing signals for improved housing demand.