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China’s central bank denies banning commercial banks on home loans

Updated: Nov 30,2016 9:36 AM     Xinhua

BEIJING — China’s central bank has not banned commercial banks from issuing personal home mortgage loans, it said on Nov 29, although the country has stepped up efforts to rein in house prices.

A report by on Nov 29 incorrectly claimed that some banks had been required by the central bank to suspend home mortgage loans, according to the People’s Bank of China.

Starting Nov 29, however, both the minimum downpayment on property in Shanghai and loan interest will be increased, while banks have been ordered to tighten their purse strings, according to a notice issued on Nov 28 by Shanghai’s housing and banking authorities.

First-time home buyers in Shanghai must pay a minimum 35 percent deposit on purchases, the downpayment on second homes will be increased to 50 percent, and buyers of commercial properties must now pay a minimum 70 percent deposit.

Meanwhile banks have been ordered to raise interest rates by 10 percent for second-time borrowers from the government’s Housing Provident Fund. The maximum amount people can now borrow from the fund has been lowered by 100,000 yuan ($14,492). In addition, people can only receive a loan from the fund twice.