Shanghai cuts home downpayment ratios

The financial hub of Shanghai lowered downpayment ratios and the minimum mortgage threshold, as bigger Chinese cities follow through on the central government’s aid for the property sector, reports Bloomberg. The city reduced downpayment ratios by 10 percentage points to a minimum of 20% for first-time buyers and 30% for second-home buyers, according to a Monday statement. The floor for mortgage rates were also lowered.

The relaxation follows China’s most forceful rescue package earlier this month, when the central bank unleashed RMB 300 billion ($41 billion) of funding to help local governments buy unsold homes. The moves were made after April home prices recorded the steepest month-on-month drop in a decade.

The central government also allowed local authorities to cut the minimum down-payment ratio and make their own decision for mortgage rates.