Housing fund ups its mortgage rates
(Shenzhen Daily)
Updated: 2006-05-08 09:38
The country's public housing fund has raised its mortgage rates for
individual house buyers by 18 basis points effective May 8, the official Xinhua
news agency said Saturday.
The annual interest rate for loans with a maturity of five years or less will
rise to 4.14 percent from 3.96 percent, Xinhua said, citing an announcement by
the Ministry of Construction, supervisor of the public housing fund.
Mortgage loans with a maturity of more than five years will now carry an
annual interest rate of 4.59 percent, up from 4.41 percent, it said.
Late last month, China's central bank raised the benchmark lending rate for
one-year loans by 0.27 basis points to 5.85 percent from 5.58 percent. The rate
for deposits remained unchanged.
The central bank said the higher benchmark rate would have a limited impact
on housing mortgages.
The lending rate hike by the central bank was aimed at preventing the economy
from overheating, after a rapid expansion of loans and fixed-asset investment in
the first quarter.
One sector of particular concern to central planners is the speculative real
estate markets in major cities.
The public housing fund, established when China reformed its housing system
in the 1990s, was designed to help medium- and low-income earners buy houses.
Employees are required to contribute 5 to 12 percent of their salaries to the
fund, matched by employers. The fund's mortgage loans carry lower rates than
commercial mortgages.
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