The Central Bank of the Republic of China (Taiwan) (中央銀行) left its policy rate unchanged at its third-quarter board meeting on September 17, the tenth consecutive quarter without a change, opting not to follow the U.S. Federal Reserve’s rate increase announced a day earlier. The discount rate stays at 2%, the collateral loan rate at 2.375%, and the short-term accommodation rate at 4.25%. At the same meeting, the central bank announced it had amended its “Regulations Governing the Extension of Mortgage Loans by Financial Institutions,” effective September 18: the maximum loan-to-value (LTV) ratio for second-home purchase mortgages taken out by individuals rises from 60% to 70%, and the requirement for land-acquisition loans to carry a signed commitment to begin construction within a set period is removed.
Both changes sit inside Taiwan’s selective credit control framework, which the central bank has used since 2021 to manage the concentration of bank lending in real estate. The 60% cap itself dates only to March 2026, when it was raised from 50%. Governor Yang Chin-long said the property-loan concentration ratio across all domestic banks had fallen to 34.44% as of end-July, down from 35.56% at end-March and 3.17 percentage points below its June 2024 peak of 37.61%, which the bank cited as evidence that credit controls are working even as this round of loosening proceeds. The bank added that speculative housing transactions have continued to cool and public expectations of rising home prices have moderated.
The looser second-home cap applies to individuals financing an additional home for owner-occupier purposes — the central bank and industry figures cited cases such as adult children buying their own home, or families upgrading or arranging housing for parents — rather than investment purchases, which remain covered by the credit controls. Yang said the bank still has room to hold rates given the inflation outlook, noting monetary policy has already been on the tighter side since 2024: “We walk our own path,” he told reporters, adding that even the board’s more hawkish members endorsed holding steady this quarter while flagging inflation to watch. The Fed’s move, a 25-basis-point increase to a range of 3.75%–4.00% announced September 16, was its first hike since July 2023.
Industry reaction to the mortgage change was positive. Chen Sheng-hung, chairman of the National Association of Real Estate Developers, called the adjustment “directionally correct,” saying second-home purchases by individuals are mostly for housing family members rather than speculation, and that the higher LTV will ease down-payment pressure on owner-occupiers. Sinyi Realty research office manager Tseng Ching-te said that, on a NT$25 million (roughly US$780,000) home, the change would cut the required down payment by about NT$2.5 million (roughly US$78,000) — enough, he said, to help some upgraders and buyers awaiting delivery of pre-sale units — though he expects the market to stay owner-occupier-driven with limited room for further price gains. Colliers International director Huang Shu-wei said removing the land-loan construction deadline gives developers facing tight land-financing conditions more flexibility.
References
BigGo Finance – Taiwan’s Central Bank Holds Rates for 10th Straight Quarter, Defying Fed Hike; Second-Home Loan Cap Raised to 70% / Central Bank of the Republic of China (Taiwan) – Amendment to the Regulations Governing the Extension of Mortgage Loans by Financial Institutions, Effective September 18, 2026
