China will lower mortgage rates on existing home loans to a level similar to those of newly issued housing loans, Pan Gongsheng, governor of the People's Bank of China (PBOC), said on Tuesday.

The average reduction in mortgage rates for existing home loans is expected to be around 0.5 percentage points, he told a press conference.

"The new policy, which is conducive to further reducing borrowers' mortgage interest expenses, is expected to benefit 50 million households, or a population of 150 million," said Pan.

This move is expected to reduce the total interest expenses for households by approximately 150 billion yuan (about 21.27 billion U.S. dollars) per year on average, which will help boost consumption and investment, he added.

The minimum down payment ratio for both first and second homes will be unified, with the nationwide minimum down payment ratio for second homes to be reduced from 25 percent to 15 percent, Pan said.

On May 17, China announced the establishment of a 300-billion-yuan re-lending facility that supports local state-owned enterprises to use those funds to buy commercial homes for affordable housing.

Pan said the PBOC will increase its funding proportion in the affordable housing re-lending policy from the original 60 percent to 100 percent.

"This adjustment will help accelerate the reduction of inventory in the commercial housing market," Pan said.