Major banks lift rates for 1st home buyers

Source: Xinhua | 2018-05-09

FOUR major Chinese commercial banks have raised their mortgage rates for first-home purchasers in Beijing, a move expected to further cool the local property market.

The Beijing branches of the Industrial and Commercial Bank of China, China Construction Bank, Agricultural Bank of China, and Bank of China have decided to lift their floor mortgage rates for first-home buyers from 1.05 times to 1.1 times of the central bank’s benchmark interest rate.

For a first-home buyer on a one-million yuan (US$157,100) mortgage over 25 years, the rate change means an extra 145 yuan would have to be paid each month.

The mortgage rate for buying second homes remains flat at 1.2 times of the central bank’s key interest rate.

The four banks said the decision was made in line with market changes and their development plans.

Analysts predict that commercial banks might continue to raise mortgage rates as the current level is still comparatively low.

Jiang Han, a researcher with Suning Institute of Finance, believes the move will impact property prices.