MADRID, September 1 (-) –
China’s financial supervisory agencies have announced reductions in mortgage interest rates and minimum initial contributions for home purchases in order to stimulate the real estate market, which in recent times has been under additional pressure due to problems of promoters Country Garden and Evergrande.
According to a joint statement from the People’s Bank of China (POBC) and the country’s National Administration of Financial Regulation, clients with mortgage loans for the purchase of their first home will be able, from September 25, to request a change rate in the contract or migrate to a new mortgage in order to reduce the interest they pay.
At the same time, the banking sector could see the early repayment of mortgages facilitated, which would increase its interest income.
In addition, in mortgages intended for the purchase of both a first and second home, buyers’ minimum initial payment will be reduced to 20% and 30%, respectively, throughout the country.
In turn, local governments will be able to specifically modify housing credit policies. Many Chinese cities have recently made changes to their housing credit policies, including allowing preferential loans to be granted for first-time home purchases, regardless of the buyer’s previous credit history.