Liquidity pressure has forced some banks in Shanghai to stop offering housing loans by raising interest rates for first home buyers, industry insiders said yesterday.
Some branches of CITIC Bank have halted mortgages after the bank hiked the rate for first home buyers to 1.2 times the official lending rate of 4.9 percent, a client manager told Shanghai Daily yesterday.
China Minsheng Bank also raised the rate to 1.1 times the official rate effective from Monday, STV reported earlier.
But most banks in Shanghai kept mortgages for first home buyers unchanged.
Lu Wenxi, senior research manager at Centaline, said smaller banks started to raise mortgage rates as early as April under liquidity pressure, while large state-owned banks continued to offer as low as 10 percent off the official lending rate.
For a borrower of 3 million yuan (US,159) mortgage over 30 years, a 10 percent hike in interest rate will raise monthly payment by 2,393 yuan.
Beijing News yesterday reported that banks in Beijing hiked mortgage rate for first home buyers to 1.1 times the official rate effective June 5.
The rate for second home buyers was lifted to 1.2 times the official rate.
Local media in Guangzhou reported that banks have raised mortgage rates since mid-May to slow the growth in housing loans.
The latest increase in mortgage rates coincide with a tightening of bank liquidity in June.