China Combined Loans: Mixing Gongjijin and Commercial Rates

Note: This content is specific to the Chinese property market.

In major Chinese cities, housing prices often exceed the lending limits of the Housing Provident Fund (Gongjijin). However, the Provident Fund interest rates (approx. 3.1%) are much lower than Commercial Bank rates (approx. 3.9%).

To solve this, buyers use the Combined Loan (Portfolio Loan).

How it Works

It is a single mortgage application that splits your debt into two parts:

1. Part A (Provident Fund): You borrow up to the maximum limit allowed by your city (e.g., 1.2M RMB in Shanghai).
2. Part B (Commercial): You borrow the remaining amount needed from a bank at market rates.

Example:

• Total Loan Needed: 3 Million RMB.
• Gongjijin: 1.2M at 3.1%.
• Commercial: 1.8M at 3.9%.

The Benefit

By maximizing the cheap Gongjijin portion, you significantly lower your weighted average interest rate. Over a 30-year term, this saves hundreds of thousands of RMB compared to a pure commercial loan.

Repayment Strategy

If you want to make an early repayment, always pay off the Commercial portion first, as it carries the higher interest rate. Keep the cheap Gongjijin debt as long as possible.

👉 China Combined Loan Calculator