In 2026, the central bank lowered the 5-year+ Loan Prime Rate (LPR) to 3.6% ā the second rate cut of the year. For mortgage holders, this means lower monthly payments ahead.
How an LPR Cut Affects Your Monthly Payment
Example: a Ā„1,000,000 loan, 30-year term, equal installment:
- Before the cut (LPR 3.95%): monthly payment ā Ā„4,743
- After the cut (LPR 3.60%): monthly payment ā Ā„4,546
- Monthly saving: Ā„197, or Ā„2,364 per year
Enter your actual loan amount and term into the mortgage calculator to see your precise payment change.
How Reset Dates Work
Your mortgage rate reset date usually offers two options:
- Every January 1: adjusts to the prior year's LPR ā the default for most banks
- The loan disbursement date: adjusts to the LPR of the month the loan was issued
If your reset date is January 1, this cut only takes effect next January. If it's your disbursement date, it may apply within a few months.
Is Prepayment Still Worth It?
With LPR trending down, the "interest saved" from prepaying is shrinking. Use the compound interest calculator to compare:
- Interest saved by prepaying vs returns from investing instead
- If investment returns > your mortgage rate, no rush to prepay
- If investment returns < your mortgage rate, partial prepayment may make sense
Practical Tips
- Confirm your reset date and plan your budget around it
- Simulate payments under different rates with the mortgage calculator
- Check whether you've maxed out your provident fund allocation in a combined loan
- Track the LPR trend and choose a reset cycle that suits you
In a rate-cut cycle, using the right calculation tools for financial planning is how you maximize interest savings.