Banks brace for steps on 3rd home loans
By Zhang Fengming |
April 17, 2010, Saturday
|
Print Edition
Print Edition
BANKS in Shanghai are studying policies on mortgages for third or more homes and suspended new applications until clearer rules are issued as early as next week, sources said yesterday.
The State Council, China's Cabinet, said on Thursday that the minimum down payment on second-home mortgages were raised to 50 percent from 40 percent. Banks also must levy an extra 10 percent interest rate on second mortgages.
Applicants who buy three or more homes can expect even higher requirements on down payments and interest rates.
A Bank of Communications credit officer, who didn't want to be identified, said yesterday that the bank was handling applications already received (before Thursday's announcement) as fast as possible to avoid the new policy. "For new home mortgage applicants we met today (yesterday), it's almost certain they will face the new tighter requirement although we haven't got a clear timetable on the new policy yet."
The BoCom officer said it's certain that the bank's stance on the second-home policy will be strictly in line with the central government's call and details on third or more mortgages are still pending, which are expected to come as early as next week.
An Industrial and Commercial Bank of China credit officer echoed a similar view. She said policies on third or more mortgages are unclear, but a second mortgage will definitely adopt at least an extra 10 percent on interest rates and a 50 percent down-payment requirement. "The days of loose credit are gone," she said.
The State Council, China's Cabinet, said on Thursday that the minimum down payment on second-home mortgages were raised to 50 percent from 40 percent. Banks also must levy an extra 10 percent interest rate on second mortgages.
Applicants who buy three or more homes can expect even higher requirements on down payments and interest rates.
A Bank of Communications credit officer, who didn't want to be identified, said yesterday that the bank was handling applications already received (before Thursday's announcement) as fast as possible to avoid the new policy. "For new home mortgage applicants we met today (yesterday), it's almost certain they will face the new tighter requirement although we haven't got a clear timetable on the new policy yet."
The BoCom officer said it's certain that the bank's stance on the second-home policy will be strictly in line with the central government's call and details on third or more mortgages are still pending, which are expected to come as early as next week.
An Industrial and Commercial Bank of China credit officer echoed a similar view. She said policies on third or more mortgages are unclear, but a second mortgage will definitely adopt at least an extra 10 percent on interest rates and a 50 percent down-payment requirement. "The days of loose credit are gone," she said.
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