In China, the scale of personal housing loans continues to shrink under the dual impact of the downward trend in real estate and weak demand. In 2025, the outstanding balance of housing loans of the six major state-owned banks decreased by more than 700 billion yuan, a larger decrease compared to the previous year. Experts attribute this trend to early repayments by the public and a lack of high willingness to purchase homes.
The six major state-owned banks in China (Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, China Construction Bank, Bank of Communications, China Postal Savings Bank) are the main lenders for personal housing loans.
According to a report by the Daily Economic News on April 4, 2025, the total outstanding balance of personal housing loans of the six state-owned banks was approximately 24.48 trillion yuan, a decrease of 711.516 billion yuan compared to the previous year. In 2024, the total balance of personal housing loans decreased by 621.057 billion yuan.
In the first half of 2025, the total decrease of the six state-owned banks was about 107.8 billion yuan, significantly lower than the 325.5 billion yuan in the first half of 2024; in the second half of 2025, there was a substantial decrease of about 602.2 billion yuan, leading to a faster deceleration, further widening the overall shrinkage of personal housing loans compared to 2024.
As the balance of personal housing loans continues to shrink, the total balance of personal housing loans of the six state-owned banks has bid goodbye to the “6 trillion yuan era.” In 2025, only seven out of the ten joint-stock banks saw growth in the balance of personal housing loans, while the rest experienced declines.
Wang Pengbo, Chief Analyst at Bocom International, stated that the decline in mortgage balances is a result of residents repaying mortgages early combined with a low willingness to purchase homes last year.
In the second half of 2022, China saw a “trend of early repayments,” with people rushing to repay their mortgages early. Wang Pengbo mentioned that early repayment situations still exist now, but it is not as prevalent as in previous years.
“The decision to repay a mortgage early depends on the difference between the current investment or savings return level of consumers and the reduced mortgage interest rates,” said Wang Pengbo. If the investment return rate is higher than the loan interest rate, it may be advisable to allocate more funds to investment; otherwise, partial or complete repayment of the loan could be considered.
Yang Haiping, a contracted researcher at the Beijing Wealth Management Industry Association, pointed out that the real estate sector is still in a period of adjustment, with many potential buyers adopting a cautious stance, overall resulting in weak loan growth.
According to Caixin, an insider from a state-owned bank revealed that the trend of early repayment of mortgages continued into 2025, but it significantly declined compared to its peak in 2024. Due to the decline in market demand, the new market offerings for mortgages have not met expectations, leading to a continued decrease in the scale of mortgages, a phenomenon seen across the industry.