Crunch: First-Tier Banks Tighten, Halt Home Equity Lending

21st Century: 一线城市住房抵押贷款变局: 利率走高、审核趋严 部分银行停贷
According to a 21st Century Business Herald reporter’s interview, in the first-tier cities such as Beijing and Shanghai, once-hot home mortgage loans tended to decline. At present, Beijing, Shanghai, a number of stock companies, small and medium banks have suspended personal residential mortgage consumer loans. Among other banks that did not stop housing mortgage loans, there were also cuts in the number of loans, upward interest rates, and tightened lending standards.

...“Home mortgage is one of the major businesses of our guarantee company. We have cooperation with dozens of banks in Beijing, but from the fourth quarter of 2017, we obviously felt that the mortgage interest rate rises again and again.” April 25th, Li Xiang Said: "In terms of consumer loans, most of the banks we cooperated with in the fourth quarter of last year were able to achieve a minimum annualized interest rate of 5.39%, but now consumer loan approval loan rates are generally between 6% and 7%."

In addition, according to Li Xiang, the approval of mortgage loans is also tightening. “The approval of the state-owned banks such as ICBC and Bank of China and the stock exchanges of CITIC and Xingye are tightening.”

On April 25, an account manager of a certain loan department of the Bank of Beijing told a 21st Century Business Herald reporter that the maximum amount of personal consumer loans has been reduced from 1 million yuan to 300,000 yuan, and the loan interest rate has risen at least 20% (annualized 5.88%) , and it is not allowed to mortgage personal unique housing.

On April 25, a customer manager of China Merchants Bank in Beijing also stated that China Merchants Bank’s consumer loan policy has been tightened this year. The current consumer loan interest rate has increased from the lowest of 6.03% at the end of last year to about 6.9%, and the number of years from the previous 10 will be shortened to 5 years, which means that the monthly repayment amount will be doubled under the same amount.
Taking CITIC Bank as an example, at the end of February, China CITIC Bank announced the suspension of personal housing mortgage loans of more than 2 million yuan in the Beijing area. (See Global Times: Bank halts home equity loans in Beijing, as measures to rein in real estate continues) On April 25th, when the 21st Century Business Herald reporter called the account manager of the credit loan department of CITIC Bank once again, the account manager told the 21st Century Business Herald reporter that the current maximum amount of housing mortgage consumer loans of China CITIC Bank was 1 million yuan, but the home mortgage business loan The ceiling has been lowered from the previous 10 million yuan to 2 million yuan, and the interest rate has generally risen from 40% (6.86%) in the beginning of this year to about 7.03% now, but the specific interest rate will be adjusted according to the different qualifications of customers.

In addition, more stocks with smaller stocks or some city commercial banks simply stopped their consumer mortgage business. For example, customer managers of Zheshang Bank Beijing Branch and Bank of Jiangsu Shanghai Branch all told 21st Century Business Herald that they have not used personal housing mortgage loans, and the discount rate on mortgage loans for home mortgages has also been reduced. “In the past, most companies could loan 70% or 60%, but now the discount rate for mortgage loans for SMEs is only around 50%.” On April 25th, an account manager of the Shanghai branch of Jiangsu Bank stated.

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