(Yicai Global) May 8 -- China's big four state-owned banks are hiking mortgage rates for first-time buyers in Beijing yet again as they look to stabilize the real estate market, the world's largest by asset value.
Local branches of Industrial and Commercial Bank of China Ltd., China Construction Bank Corp., Agricultural Bank of China Ltd. and Bank of China Ltd. have all raised rates over the past two days from 5 percent above the benchmark lending rate to 10 percent over. Mortgage rates for second homes have remained unchanged at 20 percent above.
The move will better align the lenders' rates in the capital with other cities as well as with commercial banks in Beijing, which bumped first-time rates up to as much as 20 percent higher than the benchmark in February. The big four offered mortgages with as much as a 15 percent discount prior to 2017, but have increased rates several times since.
The state-owned banks began hiking rates in Guangzhou, capital of the southern province of Guangdong, at the beginning of this year, forcing first-home buyers to pay 10 percent over the benchmark rate. They also charge 10 percent above in Shenzhen, also in Guangdong, and second-home rates in both cities can reach up to 20 percent over.
A few of the major banks still offer first-time mortgages for as little as 5 percent over the benchmark in Shanghai, but it is common to see rates at 10 percent above, according to financial website Rong360. Second-home buyers in the nation's biggest city can still buy homes for 10 percent higher than the benchmark.
Editor: James Boynton