ICBC stops rate discounts on mortgages
By Zhang Fengming |
February 1, 2011, Tuesday
|
Print Edition
Print Edition
INDUSTRIAL and Commercial Bank of China has stopped offering interest rate discounts to new first home buyers as lenders tighten mortgages amid a lower loan quota and a stricter housing policy.
Since Sunday, ICBC, China's biggest bank, has suspended offering a 15-percent discount on the mortgage interest rate, credit officers said.
"The order to stop comes directly from the Beijing headquarters," said a local credit officer who declined to be named. "For new applicants, it's a definite no - the system blocks any new discount applicants from yesterday."
China Construction Bank, the biggest mortgage lender in the country, stopped the discount to buyers of first homes bigger than 60 square meters. For smaller homes, the bank will check if the applicants are credit worthy to enjoy the discount.
Agricultural Bank of China said the bank will halt the discount after the Spring Festival holiday.
Smaller banks, including Bank of China, Shenzhen Development Bank, China Everbright Bank and Industrial Bank, have already stopped the interest rate discount to first home buyers.
Previously, banks could offer a maximum 30 percent discount for first home buyers, although more common was the 15 percent discount last year since the central government imposed several rounds of tightening in April.
On January 26 China issued its toughest policy on the housing market when the State Council, or Cabinet, ordered that banks should raise the down payment on second homes to 60 percent from 50 percent previously to curb speculation. The Cabinet also banned the purchase of a third home in cities where residents already own two. They could only buy one home elsewhere.
Families will also be banned from buying homes in cities if they are not long-time residents and cannot provide tax or social insurance certificates to show their length of residence there.
Since Sunday, ICBC, China's biggest bank, has suspended offering a 15-percent discount on the mortgage interest rate, credit officers said.
"The order to stop comes directly from the Beijing headquarters," said a local credit officer who declined to be named. "For new applicants, it's a definite no - the system blocks any new discount applicants from yesterday."
China Construction Bank, the biggest mortgage lender in the country, stopped the discount to buyers of first homes bigger than 60 square meters. For smaller homes, the bank will check if the applicants are credit worthy to enjoy the discount.
Agricultural Bank of China said the bank will halt the discount after the Spring Festival holiday.
Smaller banks, including Bank of China, Shenzhen Development Bank, China Everbright Bank and Industrial Bank, have already stopped the interest rate discount to first home buyers.
Previously, banks could offer a maximum 30 percent discount for first home buyers, although more common was the 15 percent discount last year since the central government imposed several rounds of tightening in April.
On January 26 China issued its toughest policy on the housing market when the State Council, or Cabinet, ordered that banks should raise the down payment on second homes to 60 percent from 50 percent previously to curb speculation. The Cabinet also banned the purchase of a third home in cities where residents already own two. They could only buy one home elsewhere.
Families will also be banned from buying homes in cities if they are not long-time residents and cannot provide tax or social insurance certificates to show their length of residence there.
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