This file photo shows a real estate project in Hangzhou, capital of east China's Zhejiang Province. [Photo/Xinhua]

Chinese cities started implementing lower mortgage rates for first-time homebuyers on Monday.

Housing industry experts said they believe the rate adjustment, along with various optimization policies, will help boost market sentiment as well as demand for upgraded housing among existing homeowners.

More than 40 million mortgagors would benefit from the latest first-home mortgage interest rate adjustments that would see an average cut of 0.8 percentage point in interest rates, with total value of mortgages possibly amounting to 25 trillion yuan ($3.4 trillion), Xinhua News Agency reported.

Monday's implementation is a follow-up measure to the Aug 31 joint statement by the People's Bank of China, the country's central bank, and the National Financial Regulatory Administration, a new super regulator that subsumed the China Banking and Insurance Regulatory Commission. Their statement said interest rates of existing mortgages for first-home purchases will be lowered, and banks and borrowers are encouraged to negotiate a rate change or a swap for new home loans starting Monday.

In Beijing, mortgagors can now hope to save an additional 2,000 yuan per month or thereabouts on repayment of a loan of 2 million yuan taken in January 2019 from Industrial and Commercial Bank of China, according to PBOC estimates.

Similarly, mortgagors in Shanghai can hope to pay 3,000 yuan less on a monthly basis on repayment of a loan of 5 million yuan taken in 2022 from Bank of China, which means some 600,000 yuan can be saved in the following 15 years.

"It is expected that more than 90 percent of the borrowers would be able to enjoy the benefits of the policy right away, with the rest of them tipped to get the benefit of the adjustment by the end of October," Zou Lan, head of the monetary policy department at the People's Bank of China, was quoted as saying by Xinhua.

More than 30 Chinese cities, including the four first-tier cities of Beijing, Shanghai, and Guangzhou and Shenzhen in Guangdong province, as well as cities like Chengdu in Sichuan province, Hangzhou in Zhejiang province, Xiamen in Fujian province, Changsha in Hunan province and Suzhou in Jiangsu province have redefined "first-time homebuyers" and implemented fresh measures based on the new definition, according to Shanghai Securities News.

The new measures identify people who do not own any residential properties in the respective region at the moment as first-time home buyers, which makes them eligible for lower mortgage rates.

As many as 100 real estate policies have been issued by cities across the nation this month, a new record, said Zhang Dawei, chief analyst at Centaline Property Agency Ltd.

Zhang said he believes transactions will peak in Beijing's housing market this month and in October.

Some 30 Chinese cities have eased their home purchase restrictions as of Sept 20, with 13 of them having scrapped all the limits on home purchases, according to the Zhuge Real Estate Data Research Center.

"The local measures have hugely restored market sentiment and boosted expectations, particularly in first-tier cities like Beijing and Shanghai, and pent-up demand is likely to emerge rapidly," said Chen Wenjing, director of research with the China Index Academy.

The easing of home purchase requirements in major Chinese cities, combined with lower mortgage rates, will likely support the real estate market's further recovery, Chen said.

As China's economy is in the process of recovery, the implementation of the real estate policy adjustments and optimization measures is expected to have a positive effect, gradually improving real estate investment, sales and market operations, said Fu Linghui, spokesman of the National Bureau of Statistics, during a recent State Council Information Office news conference.

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