Homeowners Jacking Up Prices in Beijing as Central Bank Lets Mortgage Rates Plunge

Are the banks suddenly optimistic or are they receiving orders from on high? Last year banks weren't offering discounts for first time homebuyers unless they had pristine credit, now several banks in Beijing are offering discounted mortgages for second home buyers, with discounts as high as 30%.

Fastest response Zhejiang Bank, the bank in the evening on March 30 announced the second home mortgage policy rules: buyers in the purchase of ordinary housing when (the total price of the apartment at ￥5 million yuan or less), down payment as low as 40 percent, and the total price of ￥5 million yuan or more villa apartment minimum 50 percent down payment.

Yesterday, more banks to join. ICBC, China Merchants Bank statement, owning a home and the corresponding set of home loans outstanding of households, in order to improve the living conditions of application for commercial individual housing loans again to buy ordinary housing, the minimum down payment ratio of 40%.

In addition, the reporter contacted the Beijing branch of China Everbright Bank credit department, the staff said, the specific document also did not hang out. Agricultural Bank of China, Beijing Rural Commercial Bank branch staff said the recent specific mortgage policy will come out.

Institutional analysis that, for the New Deal, the bank will take some reaction time, not like the same rate cuts put in place immediately, is expected to need time to implement all the New Deal about a month.

In addition to reduced down payments, interest rates are being slashed:

Zhejiang Bank lowered the interest rate on ordinary home loans of less than ￥5 million to 0.7 times the benchmark interest rate and 0.85 times the benchmark for loans of more than ￥5 million. Zhejiang Bank said the lower discount rate range temporarily cooperation for the purchase of real estate development loans have high quality customer and the bank.

Minimum 30% discount breaks the central bank's second home interest rate limit of 1.1 times the benchmark. Asked whether cutting the second home mortgage rate "is illegal", Zhejiang banks declined to comment, saying "there is no more information."

Reporters noted that the central bank said in the New Deal in the March 30 "specific proportion of down payment and interest rates reasonably determined by the banking institutions based on the borrower's credit status and repayment ability," Does this mean that the second home interest rates limit of 1.1 times is broken?

Previously the central bank restricted second home mortgages to 1.1 times the benchmark, but now Zhejiang has slashed the rate to 0.7 times. Based on current rates, that cuts the mortgage from 5.89% to 3.75%.

iFeng: 二套房利率再现7折 房主连夜上调房价