Mortgage terms extended to 40 years in property credit reform
Chinese regulators extended maximum personal mortgage terms from 30 to 40 years and introduced a lead bank system for property developers on August 28, 2026. The joint PBOC and NFRA rules also bar mortgage disbursements on pre-sale homes before project completion.
Forty-year mortgages and single lead banks
Under the new guidelines issued by the People's Bank of China (PBOC) and the National Financial Regulatory Administration (NFRA), personal housing loan maturities can now reach up to 40 years, up from the previous 30-year ceiling.
For developers, each project must designate a single lead bank to provide financing independently or head a syndicate.
Development loan maturities are capped at 5 years for pre-sale housing and 7 years for completed housing and commercial real estate projects.
In principle, developers will begin principal repayments only after completing construction filings.
Furthermore, mortgage disbursements for pre-sale homes are now withheld until projects achieve completion filing.
Closed-loop accounts and macroprudential limits
The framework anchors real estate financing to closed-loop fund management to safeguard buyer rights as urbanization moves from rapid expansion to stable development.
All project revenues, including development credit and pre-sale funds, must flow through dedicated accounts managed by the lead bank.
Regulators also outlined macroprudential tools, including minimum downpayment ratios, interest rates, and loan concentration limits, coupled with a counter-cyclical adjustment mechanism.
Ending the pre-sale leverage trap
Withholding mortgage funds until project completion decisively removes the risk of buyers paying for unfinished homes.
While 40-year loan terms provide short-term borrower relief, they also stretch household debt across decades.
For developers, these rules enforce strict ringfencing and permanently end reliance on pre-sale leverage.