(Yicai Global) Oct. 22 -- Guangdong province has set its mortgage rates in line with a central bank directive that loans for first home buyers should not fall below the loan prime rate while those for a second property should be at least 60 points above the recently revamped benchmark.

But mortgages for first-time buyers in the hi-tech hub of Shenzhen, which has a booming housing market, should be set at least 30 basis points above the LPR of the corresponding month, the Guangzhou branch of the People's Bank of China said at a press conference today. 

The PBOC introduced the revamped LPR in August to help cut financing costs for businesses, and also stipulated that it should be used to set new personal mortgage loans. The LPR rate is announced each month and is determined using quotations submitted by 18 major banks. The first five-year LPR was set at 4.85 percent on Aug. 20. Subsequent fixings were little changed.

Guangdong's lenders used the LPR to price 44 percent of newly issued loans last month, Zhang Zhidong, director of the Monetary and Credit Management Division of the Guangzhou branch, told Yicai Global. State-backed banks and other larger financial institutions made quicker progress while small- and mid-sized lenders such as rural banks have advanced at a slower pace.

Regional differences in economic development and real estate markets have led to discrepancies in local mortgage rates. For example, Shanghai pegged its loans for first-time home buyers at 4.65 percent earlier this month, 20 basis points below the central bank's minimum.