Have the six major banks' existing personal mortgage balances decreased by 7k yuan? Is it still necessary to repay the loan early?

The Wind of Early Mortgage Repayments Has It Gone Away?
Since the second half of 2022, Chinese individual home loan borrowers have accelerated early repayments, gradually forming a “prepayment wave” over a period of time.

But now, scenes of rushing to get numbers at dawn or queuing for months are no longer common.
Is the trend of early mortgage repayment still continuing?
The Daily Economic News reporter compiled data and found that the outstanding personal mortgage balance of the six major state-owned banks is about 24.48 trillion yuan, a decrease of approximately 244.8k yuan compared to the previous year.

“Currently, there are still some early repayments, but compared to a few years ago, it can no longer be called a ‘trend’,” said Wang Pengbo, a senior financial industry analyst at Botong Consulting.
The decline in mortgage loan balances is due to both residents’ early repayments and the lack of strong housing purchase intentions last year.

It is worth noting that in the first quarter of this year, the real estate market experienced a “small spring.”
Regarding this situation, senior financial policy expert Zhou Yiqin believes that this is not a short-term oversold rebound, but rather a gradual market confidence recovery driven by the steady lowering of market interest rates and the easing of home purchase policies.
He expects this trend to continue into the second quarter.

Last year, the personal mortgage balance declined.
Data shows that bank personal housing loan balances are still decreasing.

In 2024, as the main force of mortgage issuance, the six major state-owned banks reduced their personal housing loans by 7.1k yuan;
and in 2025, the net reduction is about 6.2k yuan, slightly larger than in 2024.
Notably, in the first half of 2025, the combined reduction by these banks was 107.8 billion yuan, significantly less than the 325.5 billion yuan in the first half of 2024, but in the second half of 2025, a sharp decrease of about 602.2 billion yuan caused the overall shrinkage of personal housing loans last year to further expand beyond 2024.

As the personal mortgage balance continues to shrink, the balances of the six major state-owned banks have bid farewell to the “6 trillion yuan era.”
From a nationwide perspective, the personal housing loan balance is also declining.
According to the People’s Bank of China, at the end of 2025, the national personal housing loan balance was 37.01 trillion yuan, a year-on-year decrease of 1.8%.

Industry insiders see the decline in stock mortgage balances as a “battle” between two forces:
one is how much has been “withdrawn” through early repayments,
the other is how much new loans have been “added” through new issuance.

Yang Haiping, a special researcher at the Beijing Wealth Management Industry Association, said that the real estate market is still in a period of adjustment.
There are many just-need groups, but also many who are watching and waiting.
Overall, growth in mortgage loans remains weak.

The real estate market experienced a “small spring” in the first quarter.
According to CRIC reports, in March, the transaction area of second-hand homes in 20 key cities was about 17.97 million square meters, up 117% month-on-month and 6% year-on-year;
cumulative transaction area in the first quarter was about 41.08 million square meters, up 4% year-on-year.

In this “small spring” market, first-tier cities like Beijing and Shanghai played leading roles.
“Q1 2026’s ‘small spring’ in the real estate market is mainly driven by the second-hand housing market in first-tier cities, currently in a mild recovery stage.
This warming trend may have some continuity,” Zhou Yiqin told reporters.
He also said that the arrival of this market rebound will gradually have a positive impact on the balances of personal housing loans held by commercial banks.

Zhou pointed out that active second-hand home transactions will directly boost mortgage applications, gradually slowing the decline of balances, and may provide positive support for mortgage balances in the future.
The overall real estate market is moving toward “rising volume and stable prices.”

Yan Yuejin, deputy director of the Shanghai E-House Real Estate Research Institute, said that the “small spring” is more focused on second-hand home transactions in key cities.
The market is still in the early stage of nationwide recovery, and further improvement in the second quarter will positively support the loan market.
“However, some clients use public housing funds, which are not counted in commercial bank loan data, and will also affect commercial loan balance data.”

Bank of Communications’ mortgage application volume is rising.
Regarding this year’s personal mortgage situation, many bank executives have also made assessments during earnings releases.
Among them, Bank of Communications is more optimistic about its mortgage business.

At the 2025 annual earnings conference, Vice President Zhou Wanfu said that since March 2026, the bank’s mortgage application volume has significantly increased.
“This should be a sign of stabilization in the real estate market.”
He added that if this trend continues, mortgage business in 2026 will gradually achieve positive growth, driving the bank’s overall retail loans to meet expected growth targets.

ICBC Vice President Wang Jingwu responded to the non-performing rate of personal loans.
He stated that the bank’s personal loan asset quality has remained excellent over the long term.
In recent years, affected by economic transformation, real estate market adjustments, and phased supply-demand imbalances, the non-performing rate has risen slightly in the short term, consistent with industry trends.

“He said that China’s economic foundation is solid, resilient, and has great potential.
The long-term positive trend and supporting conditions remain unchanged, and personal loan risks are controllable.”
Wang Jingwu believes that with the accelerated implementation of policies and the continued release of policy dividends, the foundation of the personal credit market will gradually improve, and the quality of personal loan assets will return to a reasonable level.

Although the government continues to introduce policies related to real estate and signs of recovery are evident, Yang Haiping told reporters that the proportion of mortgages in bank asset allocation might trend downward.

From current data, it is noted that large banks’ personal consumer loans and personal business loans have seen significant growth.
ICBC’s personal consumer loans increased by 7.1k yuan, up 18.5%, and personal business loans increased by 60k yuan, up 15.0%;
Bank of China’s domestic personal consumer loans grew by 28%.

Is it worthwhile to repay mortgages early?
Previously, the “early repayment wave” was mainly driven by borrowers due to economic fluctuations and financial market volatility in China, which lowered investment returns for ordinary residents and made them more risk-averse.
Additionally, some existing housing loans had high interest rates, with some borrowers paying over 5%, prompting some to use funds that could have been invested for early repayment.

However, as the interest rates on existing mortgages decrease, the cost of personal housing loans is also gradually falling.
According to the People’s Bank of China, in February this year, the weighted average interest rate for newly issued personal housing loans was about 3.1%, about 10 basis points lower than the same period last year, keeping loan rates at a low level.

With interest rates at such a low level, is early repayment still worthwhile?
“Whether it’s worthwhile depends on the current investment or savings returns and how much the reduced mortgage rate differs,” Wang Pengbo said.
If investment returns are higher than the mortgage rate, it may be better to invest more;
otherwise, partial or full repayment could be considered.
It’s also important to leave enough funds for daily expenses, future retirement, and medical needs.

In addition, regarding repayment methods, generally, the equal principal repayment method involves paying more principal and less interest in the early stages, making early repayment more cost-effective;
for the equal total payment method, more interest is paid early on, and less principal, so if the repayment is already halfway through, early repayment may not be necessary.

Cover image source: Xinhua News Agency