[photopress:houses.jpg,full,alignright]China Everbright Bank has been given the go-ahead to offer fixed-rate mortgages to home buyers in Shanghai and Beijing, the nation’s first lender to offer such products.
In the pilot programme, the Beijing-based lender set the interest rate at 5.94 per cent for 5-year maturities, and 6.18 per cent for 10-year maturities, slightly higher than the current floating interest rate, adjustable by year or even month. Local residents can apply for the loans directly from the property developer.
The benchmark floating rate for 5-year mortgages is 6.12 per cent. Lenders may offer first-time homebuyers up to 10 per cent discounts, lowering the rate to 5.51 per cent. The bank, in a statement, said, ‘The fixed-rate mortgage will appeal to customers who prefer stability.’
Pudong Development Bank and China Construction Bank have also applied to regulators for permission to offer fixed-rate loans.
According to an online survey conducted by Insight CN, 41.9 per cent of the 990 respondents are in favour of fixed-rates, as they reduce possible risk.
Source: China Daily