China's loan prime rate in 2026: what it means for mortgages and savings
The five-year loan prime rate, which sets mortgage rates, has stayed at 3.5% for 17 months. How the LPR works and what it means for your loans and savings.
The loan prime rate (LPR) is China's benchmark for bank lending. It is published on the 20th of each month, based on quotes from a group of banks and guided by the People's Bank of China. The LPR matters to almost everyone: it shapes what you pay on a mortgage, what businesses pay to borrow, and, indirectly, what banks pay on deposits. This guide explains where China's loan prime rate stands in 2026, how it affects mortgages and savings, and what to watch next.
Where the loan prime rate stands
There are two LPRs. The one-year LPR is 3.0% and is the reference for most business and personal loans. The five-year-and-over LPR is 3.5% and is the benchmark for mortgages. Both were left unchanged in October 2026 for the 17th month in a row, at record lows. The People's Bank of China has kept rates low to support borrowing and the property market while inflation stays subdued.
How the LPR affects mortgages
Mortgage rates in China are set as the five-year LPR plus or minus a spread agreed with your bank when you take the loan. The spread stays fixed, while the LPR part can change. Most floating-rate mortgages reprice once a year on their reset date, often 1 January or the anniversary of the loan, so a change in the LPR feeds through to your payments at the next reset rather than immediately. With the LPR steady, payments on existing floating-rate loans have not changed this year.
To see how much the rate matters, take a loan of CNY 1,000,000 over 30 years repaid in equal instalments. At 3.5%, the monthly payment is about CNY 4,490. At 3.0%, it is about CNY 4,216, roughly CNY 274 less each month, or more than CNY 98,000 over the life of the loan. Even small changes in the LPR add up over decades.
Housing provident fund loans are cheaper
Borrowing through the housing provident fund is usually cheaper than a commercial mortgage, which is why many buyers combine the two. Use the housing fund loan for as much as you can, and top up with a commercial loan priced off the LPR. Our guide to equal principal versus equal instalment mortgages explains how the repayment method changes your total interest.
What low rates mean for savers
Low lending rates go with low deposit rates. With consumer prices only 0.9% higher in September 2026 than a year earlier, even modest deposit rates keep pace with inflation, but they do little to grow your money. Many savers spread money across deposits, government bonds and funds to improve returns. Money market funds such as Yu'e Bao offer easy access; see our guide to Yu'e Bao and WeChat money market funds. For long-term savings, the personal pension scheme adds a valuable tax benefit.
Should you repay your mortgage early?
With low deposit rates, some borrowers choose to repay their mortgage early rather than keep savings in the bank. Compare your mortgage rate with what you could earn safely elsewhere after tax. If your mortgage rate is higher, prepaying can make sense, but keep enough cash for emergencies and check whether your bank charges a fee for early repayment.
What to watch next
A cut in the five-year LPR would lower mortgage costs at your next reset date, while a rise would increase them. Signals to watch include changes to the People's Bank of China's policy rates, inflation data and measures aimed at the property market. Follow the latest figures on our money in China page, and use our loan calculator to test different rates on your own mortgage.
Frequently asked questions
What is China's five-year LPR in 2026?
3.5%, unchanged in October 2026.
When is the loan prime rate published?
On the 20th of each month.
When does an LPR change affect my mortgage?
Most floating-rate mortgages reprice once a year, so a change takes effect at your next reset date.
Sources
This article is general information, not financial advice.