China's Central Bank Ups Mortgage Interest Rates, Downpayment for 2nd Residential Loans.
China has raised mortgage interest rates and increased the down payment needed for loans to finance purchases of second homes, the central bank said in a notice seen Friday.
The moves were widely expected due to official concerns over surging property prices.
The mortgage lending rate for both commercial purchases and for second residential properties is being raised to 1.1 times benchmark lending rates. China's benchmark one-year lending rate is now 7.29 percent, so the new rate would be 8.019 percent.
Buyers of second residential properties are required to make minimum down payments of 40 percent, up from the previous 30 percent, according to the notice posted on the Web site of the People's Bank of China.
Mortgages for commercial properties will require a 50 percent down payment and can be for a maximum of 10 years, the notice said.
The rules were part of a package of restrictions announced by the central bank and the China Banking Regulatory Commission aimed at discouraging the property speculation that is helping to drive prices higher.
The two agencies vowed to "strictly" tighten control over land use and lending for property development.
"It is clear that the rapid rise in real estate prices is due to irrational factors and that market risks for commercial lenders are increasing," the central bank said in a "question and answer" notice on its Web site.
The new regulations were aimed at "reducing lending risks and ensuring the healthy development of the real estate and capital markets," it said.
China has raised mortgage interest rates and increased the down payment needed for loans to finance purchases of second homes, the central bank said in a notice seen Friday.
The moves were widely expected due to official concerns over surging property prices.
The mortgage lending rate for both commercial purchases and for second residential properties is being raised to 1.1 times benchmark lending rates. China's benchmark one-year lending rate is now 7.29 percent, so the new rate would be 8.019 percent.
Buyers of second residential properties are required to make minimum down payments of 40 percent, up from the previous 30 percent, according to the notice posted on the Web site of the People's Bank of China.
Mortgages for commercial properties will require a 50 percent down payment and can be for a maximum of 10 years, the notice said.
The rules were part of a package of restrictions announced by the central bank and the China Banking Regulatory Commission aimed at discouraging the property speculation that is helping to drive prices higher.
The two agencies vowed to "strictly" tighten control over land use and lending for property development.
"It is clear that the rapid rise in real estate prices is due to irrational factors and that market risks for commercial lenders are increasing," the central bank said in a "question and answer" notice on its Web site.
The new regulations were aimed at "reducing lending risks and ensuring the healthy development of the real estate and capital markets," it said.
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