China Down Payment is Higher Than United States
Sunday, September 30th, 2007The People Republic of China has raised home mortgage interest rates and increased the down payment required for home loans to finance the purchase of second homes, the Chinese central bank said in a published public notice seen Friday, September 28, 2007. The price hikes were widely expected due to official Chinese government concerns over surging property prices.
The mortgage lending rate for both commercial purchases and for second residential properties is being raised to 1.1 times the benchmark Chinese lending rates. China’s benchmark one-year lending rate is now 7.29 percent, so the new rate would be 8.019 percent for obtaining a commercial mortgage loan or second home mortgage.
Chinese buyers of second residential properties are required to make minimum down payments of 40 percent of the purchase price, which is up from the previous 30 percent, according to the public notice posted on the Web site of the People’s Bank of China.
Chinese Mortgages for Chinese commercial properties will require a 50 percent down payment and can be for a maximum of 10 years, the Chinese public notice said.
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