Tough credit haunts homebuyers

Rising mortgage rates rock market; prudent policy on horizon gives hope

First-tier cities in China have been raising mortgage rates for homebuyers toward the maximum 20 percent since the Chinese New Year began on Feb 16, indicating potential credit problems for real estate buyers.

Among the 30 banks in Shanghai that provide home loans, 13 have raised their interest rate for first-time homebuyers. The maximum rise was 1.2 times the benchmark interest rate of 4.9 percent.