China tightens rules on low interest mortgages
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China's Public Housing Fund (PHF) is to stop offering low-interest loans to third home buyers, and raise both rates and down payments for second-home buyers, the Ministry of Housing and Urban-Rural Development, the Ministry of Finance, the People's Bank of China and the banking regulator said in a joint statement today.
Second home buyers who use the PHF will have to make a down payment of at least 50 percent and the interest rate will be set at 1.1 times the normal PHF rate, according to the statement. The down payment for first-time buyers will be raised to 20-30 percent depending on home size.
Banks have also been instructed to refuse loans to third home buyers.
People can pay a portion of their income into the PHF each month to qualify for low-interest mortgages; their employers contribute a matching amount.
China's business press carried the story above on Thursday. China.org.cn has not checked the stories and does not vouch for their accuracy.
