China Extends Home Mortgage Terms to 40 Years

The People's Bank of China and the National Financial Regulatory Administration extended the maximum term for individual home mortgages from 30 to 40 years on August 28, 2026. The central bank stated that the longer term would give borrowers and lenders greater flexibility and help promote a "virtuous cycle" between finance and the property sector.

Despite rapid approval times from major banks, prospective homebuyers have not increased borrowing. This reluctance occurs as Chinese households actively reduce existing liabilities, with household loans falling by 1.03 trillion yuan during the first eight months of 2026.

Market observers indicate that the policy does not resolve underlying financial pressures. Falling home prices continue to discourage long-term borrowing, as buyers face the risk of negative equity and banks face potential defaults.