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Construction Bank raises down payment on first home
By Zhang Fengming |
May 10, 2011, Tuesday
|
Online Edition
Online Edition
CHINA Construction Bank, China's biggest mortgage lender, has increased the down payment on first home to 40 percent in neighboring Zhejiang Province, higher than the minimum regulatory requirement of 30 percent.
Branches of the Beijing-based bank have the right to adjust their mortgage policy in line with the local market as long as they comply with the regulatory requirement, its Beijing headquarters said today.
The bank's Shanghai branch still follows the 30 percent down payment requirement, a credit officer said, noting that home buyers may face higher-than-benchmark interest rates.
Other banks, including Bank of Communications, may increase the down payment on first homes as well, sources said.
Dorothy Sit, vice chairwoman and chief executive of Hang Seng Bank China, said today the bank's mortgage policy is stricter than regulatory requirement.
Hang Seng's mortgage loans dropped 3 percent in 2010 as China tried to rein in run-away home prices.
The central government ordered banks to charge a minimum down payment of 60 percent on second homes, with interest rates 1.1 times of the benchmark rate to drive out credit-driven speculation. Banks are also banned to offer loans to third or more homes.
In February, most banks, including Industrial and Commercial Bank of China and Bank of China, halted offering rates discount on first home buyers.
Previously, banks could offer a maximum 30 percent rate discount on first home buyers, while a 15 percent discount was more common last year due to government tightening measures.
Less liquidity this year is also pushing banks to tighten mortgage. China shifted its monetary policy to prudent this year from relatively loose in 2010.
Growth of real estate loans, including mortgage and development loans, decelerated in Shanghai since last June, the China Banking Regulatory Commission Shanghai Branch said in April.
Branches of the Beijing-based bank have the right to adjust their mortgage policy in line with the local market as long as they comply with the regulatory requirement, its Beijing headquarters said today.
The bank's Shanghai branch still follows the 30 percent down payment requirement, a credit officer said, noting that home buyers may face higher-than-benchmark interest rates.
Other banks, including Bank of Communications, may increase the down payment on first homes as well, sources said.
Dorothy Sit, vice chairwoman and chief executive of Hang Seng Bank China, said today the bank's mortgage policy is stricter than regulatory requirement.
Hang Seng's mortgage loans dropped 3 percent in 2010 as China tried to rein in run-away home prices.
The central government ordered banks to charge a minimum down payment of 60 percent on second homes, with interest rates 1.1 times of the benchmark rate to drive out credit-driven speculation. Banks are also banned to offer loans to third or more homes.
In February, most banks, including Industrial and Commercial Bank of China and Bank of China, halted offering rates discount on first home buyers.
Previously, banks could offer a maximum 30 percent rate discount on first home buyers, while a 15 percent discount was more common last year due to government tightening measures.
Less liquidity this year is also pushing banks to tighten mortgage. China shifted its monetary policy to prudent this year from relatively loose in 2010.
Growth of real estate loans, including mortgage and development loans, decelerated in Shanghai since last June, the China Banking Regulatory Commission Shanghai Branch said in April.
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