---
title: "Rental Yield vs Mortgage Interest Rate in First-Tier Cities"
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/267630472.md"
description: "Founder Securities pointed out that the rental yield in 50 key cities will rise to 2.08% in 2025, but the rental yield in first-tier cities is lower than the national average mortgage interest rate of 3.06% in the third quarter. This interest rate inversion has led to a loss of support for housing prices. Referring to the experience in Hong Kong, when mortgage rates are lower than rental yields, market expectations tend to stabilize. Domestic banks have a relatively low net interest margin, and government subsidies for mortgage interest can stabilize housing prices without harming banks' net interest margins"
datetime: "2025-11-27T05:30:46.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/267630472.md)
  - [en](https://longbridge.com/en/news/267630472.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/267630472.md)
generator: "portal-rs"
---

# Rental Yield vs Mortgage Interest Rate in First-Tier Cities

Founder Securities:

According to the survey conducted by the Linping Residential Big Data Research Institute, the rental yield in 50 key cities has risen to 2.08% by 2025.

In the Wind data, the rental yields in first-tier cities are 1.61% in Beijing, 1.89% in Shanghai, and 1.76% in Shenzhen, while the average interest rate for new housing loans nationwide in the third quarter is still 3.06%. This interest rate inversion has caused the intrinsic value and potential returns of properties to fall below the cost of capital, leading to a loss of underlying support for housing prices.

Referring to the experience in Hong Kong, when mortgage rates are lower than rental yields, market expectations tend to stabilize significantly. Applying this experience to the mainland further highlights the effect of interest rate cuts on stabilizing housing prices. However, the current net interest margin of domestic banks is relatively low, and the potential fiscal subsidy for mortgage interest is aimed at achieving a similar "stabilizing housing prices" effect without harming the banks' net interest margin.

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---
> **Disclaimer: This article is for reference only and does not constitute any investment advice.**