The Loan Prime Rate (LPR) is the market-based benchmark lending rate introduced in August 2019. The 1-year LPR guides short-term corporate lending, while the 5-year+ LPR serves as the reference for mortgage rates. The "Benchmark" series are the older PBOC-administered lending rates (贷款基准利率), frozen since October 2015 at 4.35% (1Y) and 4.90% (5Y+).
Why it matters: LPR adjustments signal the PBOC's monetary policy stance. Cuts to the 5-year LPR directly reduce mortgage costs and support the real estate sector. The gap between LPR and the old benchmark rates reflects the cumulative easing since the 2019 reform.