The People’s Bank of China and the China Banking Regulatory Commission have eased mortgage lending restrictions for the first time since the global financial crisis in an effort to boost the ailing property sector, which is regarded as the weakest link in the country’s slowing economy.
People applying for a mortgage to buy a second home may now be eligible to pay less of a down payment and take advantage of lower interest rates.
Some second-home buyers will be able to enjoy the same interest rates and down payment levels that were previously only available to first-home buyers, according to a statement posted on the central bank’s website.
Under China’s existing rules, first home buyers need to pay at least a 30 per cent down payment, but, for people who want to buy a second home, a down payment of 60 per cent is required.
Banks are barred from lending money to people who want to buy third or subsequent property.
Commercial lenders will also now be permitted to offer as much as a 30 per cent discount on the central bank’s benchmark lending rates to eligible home-buyers.
Beijing loosens property restrictions for the first time since the GFC in effort to boost economy.
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