First-time home buyers in Beijing face tougher loan approvals, as China’s "Big Five" banks have withdrawn their favourable first-home loans in the city starting August, according to a report by the China Securities Journal.
The report said that first-time home buyers applying for loans received a 15 percent discount at the Agricultural Bank of China and Bank of China. However, the lending rate is now similar to the benchmark rate.
Aside from China Citic Bank, Citibank and Huaxia Bank, most banks have also withdrawn their first-home loan discount.
Some sources said that the risk of the mortgage business is controllable but the discounts provided are making the lending business less profitable. A few notable commercial banks with limited credit resources have gone as far as not offering personal housing mortgage loans.
Agricultural Bank of China, Bank of China, Bank of Communications, China Construction Bank and Industrial and Commercial Bank of China comprise the “Big Five” banks.
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