Multiple Banks Offer 40-Year Mortgages: Monthly Payment Down 636 Yuan, Total Interest Up 200,000 Yuan

More than half a month has passed since the introduction of the new policy on 40-year mortgages, with multiple banks now responding. On September 17, Bank of Nanjing stated that borrowers can apply online, with preliminary review completed in as little as three minutes and approval within 24 hours.

Beyond Bank of Nanjing, since September 10, numerous mainstream banks—including major state-owned banks and local city and rural commercial banks—have actively responded to the new mortgage policy, explicitly stating their willingness to accept applications for 40-year mortgages. The specific loan term is determined through negotiation between homebuyers and banks.

However, according to recent inquiries by Times Finance at several banks, not everyone qualifies for a 40-year mortgage. Due to regional differences and varying bank policies, unified implementation standards have yet to be established. Banks will conduct comprehensive and prudent reviews based on individual qualifications such as borrower age, employer, income, and credit history.

Market feedback indicates that homebuyers currently show limited enthusiasm for proactively applying for 40-year mortgages. In contrast, demand for extending existing mortgage terms is more urgent than for new loans. Through extensive interviews, Times Finance found that some banks have already clarified that existing mortgage business also falls under this new policy, allowing disbursed housing loans to be extended up to 40 years. Additionally, several homebuyers reported that major banks have launched application portals in their mobile banking apps, permitting extensions of original personal housing loan contracts up to a maximum of 480 installments.

Not Everyone Qualifies; Approval Still Depends on Age, Income, and Credit History

On August 28, the People's Bank of China (PBOC) and the National Financial Regulatory Administration (NFRA) jointly issued new credit regulations, officially extending the maximum term for personal housing loans from the previous 30 years to up to 40 years. According to incomplete statistics from Times Finance, as of September 18, the following institutions had published notices on their official platforms regarding implementation of the new mortgage policy:

• Bank of Nanjing
• Bank of Changsha
• Postal Savings Bank of China (PSBC)
• Hankou Bank
• Certain small and medium-sized rural commercial banks in Yunnan Province

A recent announcement by PSBC's Jiangsu Provincial Branch indicated that its personal housing loan terms can extend up to 40 years, supporting online submission of application materials, with pre-approval taking as little as 15 minutes.

According to repayment calculations provided by the bank, for a 1 million yuan mortgage at an annual interest rate of 3%, using equal principal and interest repayment:

| Loan Term | Monthly Payment | Total Repayment | |-----------|----------------|-----------------| | 40 years | ~3,580 yuan | ~1.71 million yuan | | 30 years | ~4,216 yuan | ~1.51 million yuan |

The monthly payment reduction is approximately 636 yuan (roughly 15.1%), but total interest increases by approximately 200,000 yuan.

Bank of Changsha recently announced via its official WeChat account that it has fully implemented the new policy allowing personal housing mortgage terms of up to 40 years, offering one-stop services from consultation to disbursement. Hankou Bank stated that its personal housing loan terms can extend up to 40 years, with loan-to-value ratios reaching up to 85%.

Some major state-owned banks are also promoting the new policy in Guangzhou. However, practical barriers remain, with younger first-time buyers being the primary beneficiaries. For example, at a branch of Industrial and Commercial Bank of China (ICBC), borrowers must be no older than 45 to qualify for a full 40-year term. On September 17, Times Finance contacted an ICBC branch in Tianhe District, Guangzhou, where staff confirmed:

"We just received detailed implementation guidelines from headquarters today. We can now process applications to extend mortgage terms to 40 years, but there are age requirements: the sum of the borrower's age and the loan term cannot exceed 85."

Existing Loans: Varying Approaches

Regarding existing loans, actions vary significantly among institutions. Li Lin (pseudonym), a borrower from Anhui Province, told Times Finance that he discovered an option to "extend loan note term" on his mortgage contract page in the ICBC app. After selecting the reason for application, he could choose to extend the loan term up to 480 installments.

However, ICBC also stipulates that extension periods cannot exceed half of the original loan term, meaning borrowers with short-term mortgages face significant difficulties in directly extending them to 40 years.

Some banks have explicitly excluded existing mortgages from this round of policy adjustments. A recent announcement by the Rural Credit Union of Gengma County, Yunnan Province, stated that after formal implementation, newly accepted personal housing loan business will follow the new measures; however, existing disbursed housing loans will not be affected by this policy adjustment and will continue under the original loan contracts.

Some Seek Lower Monthly Payments, Others Worry About Higher Interest Costs

Despite banks' efforts to implement the new policy, few customers have actually submitted applications for 40-year mortgages. Staff at the aforementioned ICBC branch in Tianhe District, Guangzhou, admitted to Times Finance:

"No one has applied yet. Since total interest costs increase, many customers consider the expense."

Tian Lihui, Dean of the Institute of Financial Development at Nankai University, pointed out to Times Finance that while monthly payments decrease by about 15%, total interest increases by approximately 200,000 yuan. Moreover, the credit risk cycle lengthens, requiring repayment even after retirement. Homebuyers face risks including:

• Long-term income uncertainty
• Depreciation of property value
• Thinner household financial safety nets

"Extending loan terms to 40 years is essentially a demand-side support tool that 'trades time for space,' rather than a universal welfare benefit. Its core logic is to spread repayment pressure over a longer life cycle, lowering monthly payment thresholds to stimulate genuine demand and upgrade needs, while stabilizing banks' mortgage asset scale." — Tian Lihui

Stronger Demand for Extending Existing Mortgages

Times Finance found during interviews that demand for extending existing mortgages is stronger than for new loans. However, some applicants' true motivation is to "lower monthly payments and then repay early when possible."

Li Lin, aged 29, purchased a commodity apartment in Hefei in early 2024 with a 1.09 million yuan loan originally set for a 30-year term. Following the new policy, he applied to his lending bank to extend his mortgage from 30 to 40 years and is awaiting approval.

"I recently suffered investment losses and depleted my family savings. If I maintained my previous spending habits, money would be tight every month. So when I saw this policy, I thought about reducing monthly payments to retain more cash for living expenses and save faster, planning to repay early later." — Li Lin

This approach of "long-term borrowing, short-term repayment" reflects residents' cautious attitude toward long-term debt.

Impact on Banks' Mortgage Business

Amid strong deleveraging intentions among residents, banks' personal housing loan businesses have continued to shrink in recent years, with early repayment trends persisting and existing mortgage balances significantly reduced. According to the PBOC's recently released "Statistical Report on Loan Directions of Financial Institutions for Q2 2026," as of the end of Q2 this year:

• Nationwide personal housing loan balances: 36.29 trillion yuan (down 3.8% year-on-year)
• Combined mortgage balances of the six major state-owned banks (as of June 2026): approximately 24.63 trillion yuan (a decrease of over 500 billion yuan from the end of 2025)

Due to long terms, relatively stable interest rates, and low non-performing rates, personal housing loans were once considered among banks' highest-quality assets. Industry insiders believe that the implementation of this new policy may help boost banks' mortgage businesses to some extent.

Tian noted to Times Finance that for banks, extending mortgage terms significantly increases interest income per customer, potentially slowing the decline in mortgage balances and reducing early repayment and default risks in the short term. However, risks coexist:

• Matching short-term deposits with ultra-long-term loans exacerbates banks' asset-liability duration mismatches
• Simultaneously expanding exposure to interest rate and credit risks

He emphasized, however, that the boost to banks' mortgage businesses from this policy primarily serves as risk mitigation rather than scale expansion:

"Before fundamental improvements in residents' income expectations and home-buying confidence occur, it will be difficult to reverse the overall trend of negative growth in mortgage loans." — Tian Lihui

Source: Times Finance