The top five banks in China have scrapped mortgage rate discounts for first-time home buyers in Beijing, in a move to curb its red-hot property market, according to the official China Securities Journal.
The banks — Industrial and Commercial Bank of China, China Construction Bank Corp, Bank of China Ltd, Bank of Communications Co Ltd and Agricultural Bank of China Ltd — had ordered their branches in the capital city to scrap a 15 percent discount on mortgage and issue mortgage benchmark lending rates after the Lunar New Year holiday, said the newspaper, citing anonymous sources from state banks.
“Our bank is lending at the benchmark rate of 6.6 percent for loans that extend over five years," said a banker at the Industrial and Commercial Bank of China.
However, favourable mortgage rates remain available from some smaller lenders in Beijing, including the Shanghai Pudong Development Bank Co Ltd, Hua Xia Bank Co Ltd and Industrial Bank Co Ltd.
The central government has been implementing a series of property measures to curb prices since 2009, including increasing mortgage rates and down payments for home buyers of second and subsequent homes.