China ups public housing fund mortgage rates
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China's Ministry of Housing and Urban-Rural Development will raise the Public Housing Fund (PHF) mortgage rates for home buyers starting Wednesday.
The rate for loans with a maturity of five years or more under the PHF scheme will be raised from 4.3 percent to 4.5 percent, up 0.2 percentage points, while rates for loans with a maturity of five years or less will be raised from 3.75 percent to 4.0 percent, up 0.25 percentage points, the ministry said in a statement released Wednesday.
However, in cities where the PHF is used for affordable housing projects, the rate for loans with a maturity of five years or more will be 10 percent higher than the standard rate, according to the statement.
The hikes come after China's central bank announced Tuesday to raise benchmark one-year borrowing and lending rates by 25 basis points to curb inflation.
China's Ministry of Housing and Urban-Rural Development last year carried out a scheme in 28 second- and third-tier cities to use public housing capital to fund affordable housing projects.
China launched the PHF scheme in the 1990s to help medium- and low-income workers buy homes. Employees are required to contribute 5 to 12 percent of their income to the fund while their employers contribute the same amount.
