China to implement mortgage interest subsidies to unlock housing demand

China will implement interest subsidies for housing loans starting Thursday, as part of efforts to help reduce home-buying costs and unlock the housing demand of residents.

During this period, for eligible first-time homebuyers, the fiscal authorities will provide an annualized subsidy of 1 percentage point, according to a notice jointly issued by the Ministry of Finance, the People's Bank of China and the National Financial Regulatory Administration on Tuesday.

This is the first time the central government has offered interest subsidies on commercial housing loans.

This interest subsidy policy is focused on first-time homebuyers. The floor area of each purchased unit must not exceed 120 square meters, and the purchase price must not surpass 1.5 million yuan (about 222,500 U.S. dollars).

Under this policy, the maximum amount of interest-subsidized loans can reach 1 million yuan, and the subsidy period can extend up to five years.

According to estimates, for a long-term 1-million-yuan commercial personal mortgage, the subsidies could help borrowers reduce cumulative interest payments by nearly 50,000 yuan.

By defining housing price, floor area and loan category, the policy aims to precisely benefit target groups and help lower-income families reduce their monthly mortgage burdens, the departments said.

The policy focuses on first-time buyers with essential needs, supporting families in purchasing small and medium-sized, and relatively low-priced homes, according to the departments.

"This marks the first time the central government has provided interest subsidies for commercial housing loans, representing an exploratory effort to ensure and improve people's livelihoods in the housing sector. By setting clear criteria for total housing prices, floor area and loan categories, the policy is designed to precisely target the intended beneficiaries and reduce the interest costs for residents purchasing homes with mortgages," said Liu Yi, director of Peking University's China Fiscal and Tax Center.

Unlike a simple cut in loan interest rates, housing interest subsidies are a policy tool that harnesses the combined strength of fiscal and financial policies. Homebuyers still repay principal and interest to banks under their loan contracts, while fiscal funds provide interest subsidies -- a two-way approach that both supports residents in settling into their homes and safeguards the steady operation of the banking sector.

"It is another major innovation in the coordinated fiscal and financial policy, leveraging fiscal interest subsidies to bring out the leverage effect of fiscal funds," said Luo Zhiheng, chief economist at Yuekai Securities in Beijing.

The mortgage measure is part of a broader interest subsidy package rolled out this year. Earlier policies raised interest-subsidized loan quotas for small and micro enterprises, expanded subsidy coverage, and upgraded subsidies in the consumption sector, covering both businesses and consumers.

Han Bingzhong, deputy general manager of an electronics company in southwest China's Sichuan Province, shared how his business has benefited from the new policies.

"While the factory has not yet started production, this nine-million-yuan (about 1.34 million U.S. dollars) (interest subsidy) can basically cover all our (current) management expenses," he noted.

China to implement mortgage interest subsidies to unlock housing demand

The U.S.-led coalition concluded its military mission in Iraq on Wednesday, marking the end of more than two decades of Western military presence that began with the 2003 invasion.

Iraqi Prime Minister Ali al-Zaidi on Wednesday announced the conclusion of the U.S.-led international coalition's mission to combat the Islamic State (IS) in Iraq.

On the same day, the Pentagon said the United States and its allies have officially ended Operation Inherent Resolve against the IS in Iraq.

To mark the occasion, the Iraqi government declared a four-day official holiday from September 30 to October 3, designated as "Sovereignty Day" celebrations.

"For Iraq, the withdrawal of U.S. forces means that national sovereignty is further fully implemented. Iraq will be able to decide its own stance independently. This is something to be happy about and an important moment of national significance," said Majid Al-Hasnawi, a resident.

Iraqi analysts echoed hopes that regaining full autonomy will accelerate domestic recovery.

"I think at this current time, the withdrawal of U.S. forces and international coalition troops will help promote the reconstruction process. Because the Iraqi people will rely on their own country's talents and institutions, and the people of this country will drive the national reconstruction themselves," said Faisal Radi, an economist.

The drawdown follows years of shifting security dynamics. The U.S. launched the Iraq War in 2003 and carried out a broad withdrawal in late 2011, leaving only a residual force.

In 2014, the Islamic State group seized vast territories across Iraq's west and north. The U.S.-led coalition to combat the extremist group was subsequently formed and deployed forces to Iraq.

In 2024, the U.S. and Iraq agreed on a two-phase transition to conclude the coalition's mission.

"Ending the foreign military presence is an important political decision made and being implemented by Iraq. The problem is that a foreign military presence may provide room for intervention in Iraq's domestic political affairs, and this kind of interference in Iraq's internal affairs is something the Iraqi side cannot accept," said Salah Boushi, director of the Iraq Center for Strategic Affairs.

U.S.-led coalition concludes military mission in Iraq