Bank Confirms Implementation of Planned Mortgage Measures
Bank of China became the first of the four big lenders in the country to confirm their implementation of mortgage measures that will help ease the payment for home buyers. Based on a statement that was released on Friday the bank is already following the new measures that were introduced in September 30 by a joint announcement with the Central Bank, the People’s Bank of China and the China Banking Regulatory Commission.
The easing of the mortgage rule expanded the pool of eligible home buyers that are applying for mortgage loans and to increase the amount that can be borrowed by categorizing second home buyers that have already fully repaid their existing loans as first home buyers. Based on the announcement mortgage on the second home will be treat as a first mortgage only when the buyer has no outstanding mortgages. This will result to people wishing to buy a second home wil be enjoying the same 30 percent down payment ratio that is required to first time home buyers instead of the original 60 to 70 percent down payment.
Homebuyers will also be enjoying interest rates as low as 70 percent based on a 6.55 percent benchmark instead of paying a 10 percent premium on top of the said benchmark that was required previously.
The Bank of China has already authorized their branches nationwide to decide on the implementation of these measures that are based on risk assessment. For cities without home purchases restrictions, branches of the Bank of China has the discretion on determining the down payment ratios and mortgages rates.