Potential homebuyers look at a model of a new property project at a real estate expo in Beijing. (File photo/China Daily)
(ECNS) -- Commercial banks in Beijing have hiked interest rates on first-home mortgage loans by five to 20 percent more than benchmark lending rates, Beijing News reported on Wednesday.
For first homes bought with a one-million-yuan (2,000) mortgage, the monthly repayments would be approximately 1,200 yuan more than before, the paper said.
The Beijing branch of the Shanghai-based SPD Bank raised interest rates on first-home mortgage loans by 20 percent more than benchmark rates, while the Beijing branches of the Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China and China Construction Bank all upped mortgage rates to 1.05 times benchmark rates.
The Bank of Beijing followed suit, and China Merchants Bank said it would hike rates by five percent more than benchmark rates from today.
Earlier, the China Minsheng Bank upped rates for Beijing by 10 percent more than benchmark rates from June 5, and the China Guangfa Bank raised rates for Beijing by 10 percent more than benchmark rates from August 3. They said their policy would remain unchanged.
Data from theCentalinePropertyResearchCenter showed a 10-percent hike above benchmark rates was the mainstream policy for first-home mortgage loans in Beijing. For second homes, the minimum increase was 20 percent, the paper said, citing the banks.
The sizzling housing market led to a surge in demand for home loans last year. Big banks had mortgage loan quotas, but home buyers still had to wait a long time before being granted a loan, while smaller banks either had inadequate quotas or had used them up, making things even more difficult, a source from the Beijing branch of the SPD Bank was quoted by the paper as saying.
ZhangDawei, chiefanalystatthe CentalinePropertyAgency, regarded the hike as a sign of the strictest policy in history.
The Beijing business management department of the People's Bank of China, the central bank, said commercial banks made the adjustments according to changes in market capital levels and their own needs for asset and liabilities management, amid Beijing's strict control measures on the real estate market and overall rising interest rates. The moves conformed to policy requirements and goals and thus were supported by the department, it added.
Commercial banks in Shanghai, Shenzhen and Nanjing also raised mortgage rates for first-home buyers, mostly by five to 10 percent more than benchmark lending rates, the paper said.