Understanding Chinese mortgage rules and costs
Chinese home financing is shaped by the LPR benchmark, policy-set down payments and purchase taxes. The table summarizes the main items verified against PBOC and Ministry of Finance policy.
| Rule / cost | How it works in China |
|---|---|
| Rate benchmark | Over-5-year Loan Prime Rate (LPR), published monthly by the NIFC under the PBOC |
| LPR add-on | Lender applies a basis-point add-on or discount to the LPR, set by policy and city |
| Minimum down payment | Set by national policy, differentiated first vs second home; reduced to at least 15% (2025) |
| City-tier rules | Local authorities in higher-tier cities may set stricter requirements within national limits |
| Deed tax (契税) | Buyer's purchase tax; reduced rates for a first family home verified in 2025 (from 1%) |
- The over-5-year LPR is the reference benchmark for Chinese mortgages and is published monthly (around the 20th). Most mortgages are floating and reprice against the LPR, so payments change over the life of the loan. Calculate.Studio shows the current LPR separately with its verification date.
- Minimum down-payment ratios are set nationally and adjusted locally by city, differentiated between first and second homes; the minimum was reduced to no less than 15% for both under policy verified in 2025.
- Deed tax (契税) is a purchase tax paid by the buyer. Under policy effective from December 2024 and verified in 2025, a first family home is taxed at 1% up to 140 square metres and 1.5% above, with reduced rates also applying to qualifying second homes. Rates and area thresholds can change, so confirm the current schedule.
- This calculator models the equal principal-and-interest method at a fixed rate. It does not simulate the equal-principal method, LPR repricing or local policy variations.
What is a Chinese mortgage calculator?
A Chinese mortgage calculator applies the standard amortization formula to find the monthly payment (equal principal-and-interest, the most common repayment method) that repays a home loan over its term. An alternative method used in China, equal principal repayment, starts with higher payments that decline over time; this calculator models the equal-instalment method for consistency with other countries.
The calculator derives the loan from the purchase price minus the down payment. China sets minimum down-payment ratios by national policy, differentiated between first and second homes and adjusted locally, with higher-tier cities historically applying stricter requirements. The minimum down payment for commercial housing mortgages was reduced to no less than 15% for both first and second homes under policy verified in 2025.
Chinese mortgage interest rates are quoted relative to the over-5-year Loan Prime Rate (LPR), a benchmark published monthly by the National Interbank Funding Center under the People's Bank of China (PBOC). A lender applies a basis-point add-on or discount to the LPR based on policy and the borrower's profile. Because most mortgages are floating and reprice against the LPR, actual payments change over time; this calculator holds the rate fixed for comparison.
How to use this China mortgage calculator
- Enter the purchase price and your down payment in yuan. The calculator derives the loan as price minus down payment.
- Enter the annual interest rate, which lenders quote relative to the over-5-year LPR plus or minus an add-on.
- Enter the loan term in years. Chinese home loan terms commonly extend up to 30 years.
- Read the monthly payment, the total paid over the term and the total interest.
- Check the down-payment minimum and LPR add-on for your city and home status (first or second home), and budget separately for deed tax and other purchase taxes.
The amortization formula
The equal monthly payment M is derived from the present-value annuity formula, setting the present value of all future payments equal to the loan principal P. The monthly rate r is the annual rate divided by 12; n is the number of monthly payments (years times 12). This models the equal principal-and-interest method common in China; the equal-principal method instead front-loads principal so payments decline over time. Because most Chinese mortgages float against the LPR, the real payment changes when the benchmark reprices.
Common mistakes
- Assuming a single national rule; down-payment minimums and LPR add-ons are adjusted locally, and higher-tier cities may be stricter.
- Treating a floating LPR-linked rate as fixed; most Chinese mortgages reprice when the LPR changes.
- Forgetting the deed tax (契税) and other purchase taxes, which are paid separately from the down payment.
- Confusing the equal principal-and-interest method with the equal-principal method, which has higher early payments that decline over time.
- Applying second-home rules to a first home, or vice versa, when they carry different down-payment and tax treatment.
Câu hỏi thường gặp
What is the LPR and how does it affect Chinese mortgages?
The Loan Prime Rate (LPR) is China's benchmark lending rate, published monthly by the National Interbank Funding Center under the People's Bank of China. Mortgages are priced relative to the over-5-year LPR, with each lender adding or subtracting a basis-point margin set by policy and the borrower's status. Because most Chinese mortgages float against the LPR, a change in the benchmark changes the loan's interest rate and monthly payment when the loan reprices, typically annually or on a set repricing date.
How much down payment is required to buy a home in China?
Minimum down-payment ratios in China are set by national policy and adjusted locally by city, and they differ between first and second homes. Under policy verified in 2025, the minimum down payment for individual commercial housing mortgages was reduced to no less than 15% for both first and second homes, though individual cities may apply higher requirements within the national framework. Buyers should confirm the current minimum for their city and home status.
What is deed tax (契税) in China?
Deed tax (契税) is a purchase tax the buyer pays when acquiring property in China, calculated as a percentage of the transaction value. Under policy effective from December 2024 and verified in 2025, a first family home is taxed at 1% for properties up to 140 square metres and 1.5% above that size, with reduced rates also applying to qualifying second homes. Deed tax is separate from the down payment and mortgage, so buyers should budget for it in cash.
Do Chinese cities have different mortgage rules?
Yes. While the People's Bank of China and national authorities set the overall framework — the LPR benchmark, minimum down-payment floors and mortgage rate policy — local governments adjust specific requirements for their city. Higher-tier cities such as Beijing, Shanghai, Guangzhou and Shenzhen have historically applied stricter down-payment and purchase rules. Buyers should check the current requirements for the specific city where they are purchasing.
What is the difference between equal instalment and equal principal repayment?
In China, borrowers usually choose between two repayment methods. Equal principal-and-interest keeps the monthly payment constant over the term, with the interest share falling and principal share rising over time — the method this calculator models. Equal principal repayment keeps the principal portion constant, so early payments are higher and decline over the term, resulting in less total interest but a heavier initial burden. The choice affects cash flow and total interest paid.
Are Chinese mortgage rates fixed or floating?
The large majority of Chinese home loans are floating-rate mortgages priced against the over-5-year Loan Prime Rate (LPR). When the LPR changes, the loan rate is reset on the borrower's repricing date, so the monthly payment can rise or fall over the life of the loan. This means Chinese borrowers should plan for payments that vary with the LPR rather than assuming a fixed rate for the full term.
Tài liệu tham khảo
- People's Bank of China (PBOC). Announcements on the Loan Prime Rate (LPR). pbc.gov.cn.
- People's Bank of China (PBOC). Minimum down-payment ratio and mortgage policy for individual housing loans. pbc.gov.cn.
- Ministry of Finance / State Taxation Administration of China. Deed tax (契税) policy for housing purchases (effective December 2024). mof.gov.cn.
- National Interbank Funding Center. Loan Prime Rate publication. chinamoney.com.cn.
- The State Council of the People's Republic of China. Property market support measures. english.www.gov.cn.