China will relax its lower limit for loan interest rates for first-home buyers in certain cities, the country's financial authorities said on Thursday.

By the end of 2022, governments of qualified cities will be able to decide if they will retain, reduce or remove local lower limits for interest rates on first-home loans in phases, according to a circular jointly issued by the People's Bank of China (PBOC) and the China Banking and Insurance Regulatory Commission.

This move aims to maximize the effectiveness of these cities' region-specific housing policies, and ensure the sound and steady development of China's housing market, the PBOC said.

Within the scope of local policies, banks and customers can negotiate to determine specific interest rates. This relaxation will help reduce residents' interest expenses and support the demand of first-home buyers, the central bank said.

China's home prices in 70 large and medium-sized cities eased in August, with more cities seeing a decline in home prices, according to data released by the National Bureau of Statistics.