China Housing Squeeze: Mortgage Rates Rise as Govt Bond Yields Fall

iFeng: 首套房贷利率创年内新高 房贷政策松绑短期无望
Rong 360 data shows that in October 2018, the national first-home loan average interest rate was 5.71%, equivalent to the benchmark interest rate of 1.165 times, refreshing the year high, which is the first-home loan interest rate for 22 consecutive months. The average interest rate of the second home loan in the country rose slightly by 1 BP from the previous month, reaching 6.07%, and also hit a new high in the year. At present, over 90% of the banks have raised the interest rate of the second suite by more than 10%.

The data shows that the top ten cities with the lowest average interest rate in the country's first suite are: Shanghai 5.19%, Xiamen 5.39%, Kunming 5.39%, Urumqi 5.39%, Dalian 5.44%, Fuzhou 5.49%, Beijing 5.49%, Taiyuan 5.49%, Haikou 5.58 %, Chongqing 5.62%.

Banking industry insiders said that if it is purely from the perspective of doing business, banks are still willing to do mortgage business. First of all, the current probability of bad mortgage assets is very low. Second, the loan loan amount is large, long-term, and profitable. A set of mortgages in the north, Guangzhou and Shenzhen are generally above one million. The loan time limit is generally more than 20 years, which can form a very stable asset of the bank.
Chinese government 10-year bonds yield 3.40 percent. The U.S. 10-year yields 3.07 percent. The average 30-year fixed rate mortgage in the U.S. yields 4.94 percent.

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