PBOC Lowers Pledged Supplemental Lending Rate to 1.5% and Announces Mortgage Subsidy

The People’s Bank of China reduced the interest rate on its pledged supplemental lending (PSL) facility by 0.25 percentage points, bringing the one-year rate down to 1.5 per cent. Additionally, the central bank announced a mortgage interest subsidy for first-time homebuyers starting October 1, according to the South China Morning Post.

Assembled News DeskOctober 5, 20261 min read

Conceptual illustration of a lowered lending rate impacting housing affordability. — AI-generated illustration

According to the South China Morning Post, the People’s Bank of China decreased the interest rate on its pledged supplemental lending (PSL) facility by 0.25 percentage points, resulting in the one-year PSL rate being lowered from 1.75 per cent to 1.5 per cent.

This action, which was announced by the central bank on Tuesday, is intended to better encourage policy banks to support the real economy and to align with national strategic priorities.

On the same day, the bank, in collaboration with the Ministry of Finance and the National Financial Regulatory Administration, declared that a mortgage interest subsidy policy designated for first-time homebuyers would become active starting October 1.

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