2012-08-29

Chinese banks end mortgage discounts

This could be big news. It was the PBOC rate cuts earlier this summer that sparked a rebound in the housing market, but mortgage rates are set to increase again.

Some China Banks Cut Discounts on Home Loans
Despite the central government's support for such buyers, some mid-size banks are reining in the offers as they face pressure from an increasing number of overdue loans and deteriorating asset quality amid the slowdown in the broader economy.

China Everbright Bank Co. (601818.SH) has stopped giving discounts to first-time home buyers in Shanghai and in some cities of Jiangsu province since the start of August, while China Merchants Bank Co. (3968.HK) will reduce its discounts to 10% from 15% at the end of the month, the newspaper said, citing unnamed staff from the banks.

Meanwhile, China Minsheng Banking Corp (1988.HK) has stopped extending loans to first-time home buyers altogether, it said, though Ping An Bank Co. (000001.SZ) is still offering a 15% discount on mortgage rates.

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