What exactly does mortgage LPR mean?

Mortgage LPR means that users apply for mortgage, and the mortgage interest rate is in the form of LPR+ basis point as the pricing benchmark. Before applying for a mortgage, the pricing benchmark is based on the loan benchmark interest rate. If the user chooses the floating interest rate mode of LPR+ basis point, then when LPR goes down, the mortgage interest rate will be lowered, and the future mortgage interest will also be reduced.

With the increase of LPR, the mortgage interest rate will also increase, and the mortgage interest will naturally increase. Therefore, choosing the floating interest rate model of LPR+ basis point is actually risky.

Extended data

The interest rate of individual housing loan is an integral part of the loan interest rate system. In the process of reforming and perfecting the formation mechanism of quoted interest rate (LPR) in the loan market, the pricing benchmark of individual housing loans also needs to be converted from the benchmark interest rate of loans to LPR, so as to better play the role of the market. At the same time, the personal housing loan interest rate is also an important part of the long-term management mechanism of the real estate market and the regional differentiated housing credit policy.

At present, the benchmark interest rate for central bank loans over five years is 4.9%. Compared with the benchmark interest rate, LPR has a higher degree of marketization. If the LPR interest rate is lowered, the minimum interest rate of the first and second home loans will naturally be lowered.