BEIJING / RankWire.AI / – China kept its benchmark lending rates steady in September, signaling a prolonged period of stable borrowing costs nationwide. The one-year loan prime rate (LPR) remained at 3.0%, and the over-five-year rate stayed at 3.5%. The longer-term benchmark is frequently used by banks to price mortgages. Both rates in September matched the August figures, continuing their unchanged status. These rates are crucial for loan pricing throughout China’s banking system.
The People’s Bank of China manages the framework that determines the loan prime rate, with the monthly fixing provided by the National Interbank Funding Center. The one-year LPR acts as a reference point for numerous business and household loans, while the over-five-year rate influences mortgage pricing and long-term borrowing. In September, the rates remained stable across both major maturities.
This decision to keep the LPR unchanged coincides with recent data on inflation, credit, and the property sector. China’s consumer price index increased by 0.8% in August compared to the previous year, with prices rising 0.4% from July. These figures offer the latest insight into consumer inflation. The rate decision also considers new housing and financing data covering activity through the first eight months of 2026.
Mortgage benchmark remains at 3.5%
Housing market trends in August displayed varied performances across China’s largest cities. First-tier cities experienced a 0.1% rise in new home prices from July, with Shanghai up 0.4%, Guangzhou 0.1%, and Shenzhen 0.2%. Conversely, Beijing saw a 0.2% decrease. These figures reflect uneven price dynamics across China’s key property markets.
Total property investment reached 4.798 trillion yuan from January to August, down 19.9% year-on-year. Residential investment declined 19.7% to 3.702 trillion yuan, while sales of newly built commercial properties totaled 4.747 trillion yuan, a decrease of 13.0%. The property market remains closely tied to the over-five-year LPR, which lenders rely on for setting mortgage terms.
Indicators of credit and property activity align with September’s rate decision
During the first eight months of 2026, commercial property sales of 498.8 million square meters were recorded, representing a 12.1% decline annually. Residential sales area fell 13.0%, with sales value down 13.1%. Property developers’ individual mortgage loans amounted to 684.6 billion yuan, dropping 22.4% compared to the previous year. These figures offer context for housing-related borrowing conditions.
By the end of August, China’s outstanding social financing totaled 464.8 trillion yuan, up 7.2% from a year earlier. Loans to the real economy within the social financing framework stood at 278.63 trillion yuan, increasing 5.0%. Government bonds accounted for 103.69 trillion yuan, a rise of 13.5%. In light of this data, the People’s Bank of China maintained the one-year LPR at 3.0% and the over-five-year rate at 3.5%.