Chinese banks discount mortgage rates

After January's dismal housing results, Chinese banks are cutting mortgage interest rates. Last year, many banks were charging premiums, generally about 10% above the benchmark rate.

Shanghai banks lower mortgage interest rates

"Rumor has it that major State-owned banks have started to offer benchmark interest rates for a first-home purchase, while some smaller commercial banks and foreign-funded commercial banks are offering a 5-percent discount compared with the benchmark interest rate," said Lu Qilin, research director at Shanghai Deovolente Realty Co, a Shanghai-based real estate agency.

First-time homebuyers were only able to apply for a mortgage interest rate at 10 percent above the benchmark level last year because of the credit crunch and a State-backed campaign to deflate the property bubble.

Banks may be discounting rates to grab market share early in the year.

Beijing has seen a similar easing, see: 京城银行房贷大面积回归基准利率 相比去年明显松动. (Beijing banks return to normal interest rates, loose than last year). This article quotes the big state owned banks as saying their policies are consistent, while some smaller Chinese banks are offering discounts to customers with good credit. It goes on to say foreign banks, such as Citibank and HSBC, have the most lenient standards and offer discounts of 5 to 10%.