China’s Central Bank decided to slash its benchmark interest rates last week, with the Guangdong Huaxing Bank being the first bank to cut rates, saying it will offer a 30 percent discount to first-time home buyers.
However, the state-owned bank stressed that it will continue to strictly implement the policy of raising the benchmark interest rate by 1.1 times for second-time buyers.
Despite the central bank’s decision to cut rates, most banks, including state-owned ones, have maintained their maximum discount rate at 15 percent for first home buyers.
Nonetheless, one employee at a state-owned bank in Shanghai revealed that they could adjust their mortgage discount rate to 20 percent this week.
An industry watcher said that capital costs for various banks had led to different discount rates. However, if a bank lowers its mortgage rates, it is more likely that other banks will follow suit.
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