New Youth Home Loan 2.0: Interest Subsidy of 2 Code Points to be Phased Out Over 7 Years
Taiwan's Ministry of Finance is considering a phased reduction of the current 2 code-point interest subsidy for the New Youth Home Loan 2.0 program, aiming for a complete phase-out by the 7th year to gradually return to market mechanisms.
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- 📰 Published: June 10, 2026 at 17:36
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(Central News Agency reporter Lu Yan-ci, Taipei 10th) The New Youth Home Loan 2.0 (New Qing'an) program is expected to be announced at the end of June, drawing attention to whether state-owned banks will continue interest subsidies and the 5-year grace period. A bank executive revealed today that the interest subsidy may be phased out gradually, maintaining the combined 2 code-point subsidy from the government and state-owned banks for the first 3 years, then reducing by 0.5 code points annually for the next 4 years. This means the interest subsidy would be completely phased out by the 7th year, though the plan has yet to be finalized.
According to statistics from the National Treasury Administration of the Ministry of Finance, as of the end of April this year, state-owned banks had processed a cumulative total of 526,006 applications for the Youth Home Loan (New Qing'an), amounting to NT$2.822147 trillion. Among the banks, the two state-run banks, Bank of Taiwan and Land Bank of Taiwan, were the most active, together accounting for 50.6% of the total applications processed.
The New Qing'an program is expected to expire at the end of July this year. Minister of Finance Chuang Tsui-yun stated today during an interpellation session at the Finance Committee of the Legislative Yuan that the Ministry is collecting opinions from various sectors. Considerations will include public needs, financial markets, and the real estate market, with a plan expected to be proposed by the end of June and explained to the public.
According to sources, state-owned banks have submitted several suggestions to the Ministry of Finance, including shortening the maximum grace period from 5 years to 3 years, ending interest subsidies to return loan rates to market mechanisms, and setting a rule that the borrower's age plus the loan term should not exceed 80 years. Media reports have previously indicated that the interest subsidy for New Qing'an 2.0 is likely to be phased out gradually.
The bank executive explained that the current New Qing'an loan involves a 1.5 code-point subsidy from the government and a 0.5 code-point subsidy from state-owned banks. The gradual phase-out means maintaining the 2 code-point subsidy for the first 3 years, then reducing it by 0.5 code points annually for the next 4 years. The government subsidy would be reduced first, while the banks' portion would be reduced starting in the 7th year.
The bank executive acknowledged that the interest subsidy affects the net interest margin of each bank. For example, with the same cost of funds, there is a difference in capital efficiency between offering the New Qing'an preferential rate of 1.775% and a normal mortgage rate of 2% to 3%. However, once the policy is finalized, the banks will continue to implement the policy of assisting citizens without their own homes in purchasing residential properties. (Editor: Pan Yi-jing) 1150610
According to statistics from the National Treasury Administration of the Ministry of Finance, as of the end of April this year, state-owned banks had processed a cumulative total of 526,006 applications for the Youth Home Loan (New Qing'an), amounting to NT$2.822147 trillion. Among the banks, the two state-run banks, Bank of Taiwan and Land Bank of Taiwan, were the most active, together accounting for 50.6% of the total applications processed.
The New Qing'an program is expected to expire at the end of July this year. Minister of Finance Chuang Tsui-yun stated today during an interpellation session at the Finance Committee of the Legislative Yuan that the Ministry is collecting opinions from various sectors. Considerations will include public needs, financial markets, and the real estate market, with a plan expected to be proposed by the end of June and explained to the public.
According to sources, state-owned banks have submitted several suggestions to the Ministry of Finance, including shortening the maximum grace period from 5 years to 3 years, ending interest subsidies to return loan rates to market mechanisms, and setting a rule that the borrower's age plus the loan term should not exceed 80 years. Media reports have previously indicated that the interest subsidy for New Qing'an 2.0 is likely to be phased out gradually.
The bank executive explained that the current New Qing'an loan involves a 1.5 code-point subsidy from the government and a 0.5 code-point subsidy from state-owned banks. The gradual phase-out means maintaining the 2 code-point subsidy for the first 3 years, then reducing it by 0.5 code points annually for the next 4 years. The government subsidy would be reduced first, while the banks' portion would be reduced starting in the 7th year.
The bank executive acknowledged that the interest subsidy affects the net interest margin of each bank. For example, with the same cost of funds, there is a difference in capital efficiency between offering the New Qing'an preferential rate of 1.775% and a normal mortgage rate of 2% to 3%. However, once the policy is finalized, the banks will continue to implement the policy of assisting citizens without their own homes in purchasing residential properties. (Editor: Pan Yi-jing) 1150610
FAQ
When will the New Qing'an 2.0 interest subsidy change take effect?
The plan will be announced at the end of June. The current 2 code-point subsidy will be maintained for the first 3 years, then gradually reduced over the next 4 years.
What will happen to mortgage rates after the subsidy ends?
Once the subsidy is fully phased out, rates are expected to be determined by market mechanisms, likely approaching normal mortgage rate levels.
Can I still apply for the current New Qing'an loan?
Yes, the current program is open until the end of July this year. Details of version 2.0 will be announced by the end of June.