China extends mortgage terms to 40 years amid low buyer demand

Chinese authorities have extended the maximum term for individual home mortgages from 30 to 40 years. The policy, announced jointly by the People’s Bank of China (PBOC) and the National Financial Regulatory Administration, aims to provide greater flexibility for borrowers and lenders while fostering a “virtuous cycle” between the financial and property sectors.

Despite major banks quickly implementing the change and offering rapid approval times, consumer demand remains low. Reports indicate that prospective homebuyers are hesitant to take on new debt amid a broader economic slowdown. Instead of utilizing longer loan terms, many Chinese households are focused on reducing existing financial liabilities.

Data from the PBOC shows a significant trend in shifting household behavior, with household loans falling by 1.03 trillion yuan ($150 billion) during the first eight months of 2026. This reluctance to borrow is particularly evident in long-term household debt, including mortgages.