BOC tightens 1st home loans
By Zhang Fengming |
February 4, 2010, Thursday
|
Print Edition
Print Edition
THE Bank of China became the first bank in the country to tighten its individual mortgage policies on first home buyers, making it difficult for them to enjoy a 30 percent discount on interest rates.
"We have a notice from headquarters about trimming the discount rate on first home mortgages," the Shanghai branch of the Beijing-based bank said yesterday. "It is to deepen the different policies on home buyers."
It was reported that the Beijing branch of BOC has stopped offering the 30 percent discount on interest rates and is giving a maximum 15 percent discount instead.
"The notice didn't mention halting the 30 percent rate discount, but it is definite that less discount can be made," the Shanghai branch said. "The applicant's creditworthiness will be more strictly scrutinized."
The People's Bank of China said on October 27, 2008, that banks could double the 15 percent discount on mortgage rates to 30 percent for first home buyers. The buyers could also enjoy a minimum down payment of 20 percent from the previous 30 percent.
The move was made when the real estate market lost steam as some developers were on the brink of going bust amid the global financial crisis.
However, housing transactions and prices have surged since March 2009, pushing the government to take a tougher stance since the second half of 2009 to cool rapidly rising property prices in major cities like Shanghai and Beijing. Banks have since required to take at least a 40 percent down payment and charge higher interest rates on second home loans.
BOC's rivals, including the Industrial and Commercial Bank of China and the Bank of Communications, still offer the maximum 30 percent rate discount on first home mortgages.
"We have a notice from headquarters about trimming the discount rate on first home mortgages," the Shanghai branch of the Beijing-based bank said yesterday. "It is to deepen the different policies on home buyers."
It was reported that the Beijing branch of BOC has stopped offering the 30 percent discount on interest rates and is giving a maximum 15 percent discount instead.
"The notice didn't mention halting the 30 percent rate discount, but it is definite that less discount can be made," the Shanghai branch said. "The applicant's creditworthiness will be more strictly scrutinized."
The People's Bank of China said on October 27, 2008, that banks could double the 15 percent discount on mortgage rates to 30 percent for first home buyers. The buyers could also enjoy a minimum down payment of 20 percent from the previous 30 percent.
The move was made when the real estate market lost steam as some developers were on the brink of going bust amid the global financial crisis.
However, housing transactions and prices have surged since March 2009, pushing the government to take a tougher stance since the second half of 2009 to cool rapidly rising property prices in major cities like Shanghai and Beijing. Banks have since required to take at least a 40 percent down payment and charge higher interest rates on second home loans.
BOC's rivals, including the Industrial and Commercial Bank of China and the Bank of Communications, still offer the maximum 30 percent rate discount on first home mortgages.
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