2011-02-24 15:50

China's top five State-owned banks have called off the mortgage rate discounts for first-time home buyers. They will stick to the benchmark lending rate set by the central bank, the China Securities Journal reported Thursday.

"Our bank is lending at the benchmark rate of 6.6 percent for loans that extend over five years," a banker at Industrial and Commercial Bank (ICBC) said.

According to the newspaper, some smaller banks are still offering favorable mortgage rates in Beijing. Shanghai Pudong Development Bank Co Ltd and Industrial Bank Co Ltd are offering discounts of 10 percent on their mortgage rates. Hua Xia Bank Co Ltd is providing discounts of 15 percent.

Industry insiders pointed out that the five banks' mortgage businesses account for half of the business conducted by banks in Beijing. Those banks can soon expect some followers in the industry to scrap mortgage rate discounts, the newspaper said.

Commercial banks in Beijing are strictly implementing the mortgage rate, which is 1.1 times the benchmark lending rate for second-time home buyers, according to the newspaper.

The five largest banks in China are Industrial and Commercial Bank of China, Agricultural Bank of China Ltd, Bank of China Ltd, China Construction Bank Corp, and Bank of Communications Co Ltd.