AsianFin--Mortgage interest rates in several Chinese cities are expected to dip into the 2% range after the central bank cut its benchmark lending rates for the second time this year.

In Nanjing, Jiangsu province, the loan rates for first home are projected to drop to a record low of 2.95%, which is 90 basis points below the Loan Prime Rate (LPR), according to calculations based on data from the Centaline Property Research Institute.

China's average mortgage rate was 3.5% in June, with rates for first homes averaging 3.3%, down 60 basis points from a year earlier and 20 basis points from May, based on Centaline Property Research Institute statistics.

The People's Bank of China on Monday reduced the one-year LPR by 10 basis points to 3.35% and the five-year LPR by the same margin to 3.85%. This follows a 25 basis point cut in February. Since July 2020, mortgage rates have been tied to the LPR, with adjustments made based on the 'LPR minus n bps' formula stipulated in mortgage contracts whenever the LPR changes.