Tighter lid on mortgages on cards
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More banks in Shanghai will tighten housing loans this year, a survey revealed yesterday.
Banks are expecting the market for mortgages to be flat this year and more of them said they will "tighten housing credit step by step" or "selectively support" housing loans, the Shanghai Bureau of the China Banking Regulatory Commission said yesterday, quoting a survey it made on 176 bankers in the city recently.
Banks are already taking steps to tighten the housing credit market, which surged rapidly in 2009 in tandem with a boom in property transactions and prices.
In February, the Bank of China became the first bank to tighten its individual mortgage policies. The majority of banks in Shanghai, including major entities like the Bank of Communications and smaller lenders such as the Bank of Shanghai, are following suit.
The banks raised the bar for first home buyers to enjoy a lower interest rate. Now only applicants with good credit background and able to pay a down payment of at least 40 percent can enjoy a 30 percent discount on the rate. Previously, almost all first home mortgage applicants could enjoy the 30 percent rate discount and they needed to make only a 20 percent down payment.
Second-home buyers also face a stricter requirement to obtain credit.
In Shanghai, individual mortgages soared to a record 19.6 billion yuan in January, up 19.1 billion yuan from a year ago, the Shanghai headquarters of the People's Bank of China said.
