In April, the LPR remains unchanged. It is expected that the policy rate cut in the second quarter will drive down the LPR. There is room for a reduction in mortgage rates this year.

Today, the People's Bank of China authorized the National Interbank Funding Center to announce that the Loan Prime Rate (LPR) for April 2025 is as follows: the 1-year LPR is 3.1% and the 5-year and above LPR is 3.6%. The LPR for both of these terms remains unchanged from the previous month. Several industry insiders analyzed that the unchanged LPR for April meets market expectations. This is mainly due to the stability of the 7-day reverse repurchase rate anchor, which continues to put pressure on banks' net interest margins, and banks lack the motivation to adjust their LPR pricing. Additionally, the strong economic performance in the first quarter has reduced the urgency for a decrease in LPR. Looking ahead, industry insiders predict that a strong policy interest rate cut in the next step will lead to a decline in the LPR, thereby guiding lower loan rates for enterprises and residents and significantly reducing the financing costs of the real economy. The urgency to decrease the LPR is weak, as the LPR pricing has remained unchanged for 6 consecutive months. Many industry insiders believe that the unchanged LPR for April meets market expectations. Wang Qing, Chief Macro Analyst at Orient Securities, explained that the policy rate (People's Bank of China's 7-day reverse repurchase rate) has remained unchanged since April, indicating that the pricing basis for this month's LPR has not changed. This suggests that the LPR for April will remain stable. Looking ahead, Wang Qing predicts that a policy interest rate cut in the second quarter will lead to a decline in the LPR. Wang Qing believes that the timing for the second quarter's "selective reduction in reserve requirement and interest rates" is ripe, and the decrease may happen in April. The expected rate cut could be up to 30 basis points, similar to the total reduction last year. This indicates that a strong policy interest rate cut will lead to a decline in the LPR, guiding lower loan rates for enterprises and residents, and significantly reducing the financing costs of the real economy. The 5-year and above LPR is closely related to mortgage rates. Wang Xiaoqiang, Chief Analyst at Linping Residential Big Data Research Institute, mentioned that the market is currently seeing an increase in transaction volume compared to the same period last year, but the downward trend in housing prices has weakened, and market confidence is still at a low point. Wang predicts that there is room for a decrease in mortgage rates this year. These predictions are based on information from Finance Associated Press.