Core Viewpoint - The article discusses the recent trend of rising mortgage rates in Guangzhou despite a general downward trend in the Loan Prime Rate (LPR), highlighting the uncertainty surrounding these changes and their implications for the housing market [1][2]. Group 1: Mortgage Rate Changes - Guangzhou's first home mortgage rate has been raised by 10 basis points (BP) to 3.1%, changing from LPR-60BP to LPR-50BP, effective from May 17 [1]. - There is speculation that if the LPR is lowered by 10 BP on May 20, the mortgage rate could potentially drop to 3% [1][2]. - The current mortgage rate of 3% is considered a critical threshold for banks, as rates below this may lead to losses in their mortgage business [2]. Group 2: LPR and Market Reactions - The People's Bank of China announced a reduction in policy rates, which is expected to lead to a corresponding decrease in the LPR by approximately 10 BP [2]. - If the LPR decreases, it could result in several cities seeing their mortgage rates fall into the "2" range, which would be a significant shift in the market [2]. - Last year, following a decrease in the LPR, Guangzhou saw extremely low mortgage rates, with some banks offering rates as low as 2.6%, creating a competitive environment among lenders [3][4]. Group 3: Historical Context - The trend of ultra-low mortgage rates in Guangzhou was halted in October last year, leading to a standardization of the first home mortgage rate at 3% [4]. - Prior to this, multiple cities had also experienced first home mortgage rates entering the "2" range, indicating a competitive pricing environment among banks [4].

Group 1 - The LPR (Loan Prime Rate) is trending downward, yet there are indications that mortgage rates may be increased, with reports of first-home mortgage rates in Guangzhou rising by 10 basis points to 3.1% [1][2] - There is uncertainty regarding the mortgage rate adjustments, as some mortgage intermediaries have confirmed the increase, while others await official notifications from banks [1][2] - The People's Bank of China announced a reduction in policy rates, which is expected to lead to a corresponding decrease in the LPR by approximately 0.1 percentage points [1] Group 2 - If the LPR is reduced by 10 basis points, it could result in mortgage rates in several cities dropping to the "2" range, with a potential rate of 2.9% in Guangzhou if the current discount remains [2] - Maintaining a mortgage rate at or above 3% is crucial for banks, as rates below this threshold could lead to unprofitable mortgage operations [2] - Following a previous LPR reduction in July of last year, Guangzhou saw extremely low mortgage rates, with some banks offering rates as low as 2.6%, which was below the public fund rate [3]