Average mortgage rates for first-time buyers ticked up by about 5.38% in 35 major cities in December. That’s a 0.93 percentage point jump year-on-year. The average rate is 1.1 times the central bank’s benchmark rate.
Analysts at Rong 360 and the Bank of Communications agree that Tier I mortgage rates will likely continue to tick up this year as banks cut their exposure to any potential “bubbles”.
The move is in line with on-going national policy to tighten controls on the home sales market and curb speculation. The policies, which were initially aimed at repeat buyers, are now being expanded to include first-time buyers.
Banks in Beijing have stated charging first-time buyers 1.05-1.3 times the benchmark rate. In Shanghai first-time buyers are being charged 1.02 times the benchmark, and second-time buyers are being charged 1.11 times the benchmark.
The preferential rate for first-time buyers in Shanghai is expected to come to an end this year.
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