BEIJING / RankWire.AI / – China kept its benchmark lending rates steady in September, prolonging a phase of unchanged borrowing costs. The one-year loan prime rate remained at 3.0%, while the over-five-year rate held at 3.5%. Financial institutions typically reference the longer-term benchmark when calculating mortgage rates. The September rate setting kept both figures at the same levels observed in August, maintaining their significance in loan pricing across China’s banking sector.
The People’s Bank of China manages the system used to establish the loan prime rate. The monthly fixing is published by the National Interbank Funding Center. The one-year LPR functions as a benchmark for many corporate and consumer loans, while the over-five-year LPR directly influences mortgage terms and long-term borrowing rates. The decision in September kept these key loan reference rates unchanged across both major maturity brackets.
This stability in the LPR comes alongside recent data on inflation, credit, and the housing market. China’s consumer price index increased by 0.8% in August compared to the previous year, and prices also grew by 0.4% from July. These figures offer the latest insight into consumer inflation. The rate decision also reflects new housing and credit activity data covering the first eight months of 2026.
Mortgage Reference Rate Maintains at 3.5%
Housing market data in August displayed varied trends across China’s leading cities. In first-tier cities, new home prices rose 0.1% from July. Shanghai experienced a 0.4% monthly increase, Guangzhou’s prices went up by 0.1%, and Shenzhen saw a 0.2% rise. Conversely, Beijing’s prices declined by 0.2% during the same period. These figures highlight uneven price movements within the country’s largest property markets.
Total property investment reached 4.798 trillion yuan from January to August, representing a 19.9% decrease compared to the same period last year. Residential investment dropped 19.7% to 3.702 trillion yuan. Meanwhile, sales of newly constructed commercial properties amounted to 4.747 trillion yuan, down by 13.0%. The property sector remains closely linked to the over-five-year LPR, as this rate influences many mortgage agreements.
Housing and Credit Data Shed Light on September Rate Choice
During the first eight months of 2026, new commercial property sales totaled 498.8 million square meters, reflecting a 12.1% year-on-year decline. Residential sales area decreased by 13.0%, while the value of residential sales dropped by 13.1%. Property developers’ individual mortgage loans summed to 684.6 billion yuan, which is 22.4% lower than the previous year. These figures offer additional context for borrowing conditions related to housing.
By the end of August, China’s outstanding social financing reached 464.8 trillion yuan, an increase of 7.2% compared to a year earlier. Loans in renminbi to the real economy stood at 278.63 trillion yuan, a 5.0% rise. Government bonds within total social financing reached 103.69 trillion yuan, representing a 13.5% increase. In light of these developments, the People’s Bank of China decided to hold the one-year LPR at 3.0% and the over-five-year rate at 3.5%.