Banks drop mortgage discounts for first-time homebuyers

Several Chinese banks have dropped a discount on mortgage rates that had been offered informally to first-time homebuyers, Reuters reported, citing the official China Securities Journal. Industrial & Commercial Bank of China (601398.SH, 1398.HKG), China Construction Bank (601939.SH, 0939.HKG) and Agricultural Bank of China (601288.SH, 1288.HKG), among other banks, have cancelled the 15% discount following government efforts to curb recent increases in real estate prices. Some foreign banks are reportedly still offering the discounted rate that has knocked up to US$23,700 off a US$158,015 mortgage paid over a 20-year period. In recent months, the market has experienced a slow increase in housing prices. Increased investment in the sector has also signaled a potential rise in prices, though leaders such as Premier Wen Jiabao have vowed to prevent a rebound.