BEIJING / RankWire.AI / – China kept its benchmark lending rates unchanged in September, prolonging a period of consistent borrowing costs. The one-year loan prime rate remained at 3.0%, and the over-five-year rate stayed at 3.5%. These longer-term benchmarks are typically used by banks when setting mortgage prices. The September fixings held both rates at the same levels as in August, continuing to play a key role in loan pricing across the country’s banking sector.
The People’s Bank of China manages the framework for determining the loan prime rate, with the monthly fixing published by the National Interbank Funding Center. The one-year LPR acts as a reference for many corporate and household loans, while the over-five-year LPR influences mortgage calculations and other long-term borrowings. The decision in September left these lending benchmarks unchanged for both key maturities.
This stability in the LPR 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, and prices rose by 0.4% from July. These figures offer the latest insights into consumer inflation. The rate decision also follows new housing and financing activity data covering the first eight months of 2026.
Mortgage Rate Remains Steady at 3.5%
Housing market data in August continued to show varied trends among China’s major cities. Prices for new homes in first-tier cities increased by 0.1% from July, with Shanghai seeing a 0.4% rise. Guangzhou’s prices grew by 0.1%, Shenzhen advanced by 0.2%, and Beijing experienced a 0.2% decline during the same period. These figures highlight the uneven movements in property prices across the country’s largest markets.
Investment in real estate reached 4.798 trillion yuan from January to August, reflecting a 19.9% decrease compared to last year. Residential investment declined by 19.7% to 3.702 trillion yuan. Meanwhile, sales of newly constructed commercial properties totaled 4.747 trillion yuan, dropping by 13.0%. The property sector remains closely tied to the over-five-year LPR, as many mortgage agreements are based on that rate.
Indicators in Credit and Property Markets Inform September’s Rate Decision
In the first eight months of 2026, commercial property sales reached 498.8 million square meters, a 12.1% decline year-over-year. Residential sales area fell by 13.0%, with sales value decreasing by 13.1%. Property developers obtained 684.6 billion yuan in individual mortgage loans, which is 22.4% lower than in the previous year. These figures offer additional context for housing-related borrowing trends.
By the end of August, China’s outstanding social financing totaled 464.8 trillion yuan, an increase of 7.2% from a year earlier. Social loans to the real economy amounted to 278.63 trillion yuan, up 5.0%. Government bonds within total social financing reached 103.69 trillion yuan, a rise of 13.5%. Against this backdrop, the People’s Bank of China chose to keep the one-year LPR at 3.0% and the over-five-year rate at 3.5%.