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AgBank rate discounts for first-home buyers
THE Agricultural Bank of China, the country’s third-biggest lender, will start offering interest rate discounts for first-home mortgages next month in Shanghai.
AgBank said it will give a discount of 5 percent from the benchmark lending rate for first-home buyers in Shanghai, a pricing adjustment made keeping in mind the market conditions. However, the discount is only limited to customers with sound credit history and subject to other criteria that the lender did not wish to go into details.
A slew of Chinese banks floated the rate by 5-10 percent earlier this year. According to bank sources, most Chinese and foreign banks in Shanghai still lend at benchmark rates or float 5 percent up the guidance rate.
Various media reported yesterday that AgBank is not the only bank to lower lending rates for homebuyers but the rest of the Big-Four banks, namely the Industrial and Commercial Bank of China, China Construction Bank and the Bank of China, are all offering discounts.
The state-owned Big-Four banks extended about a third of the bank loans in China last year. They are not only dominant in the market but also important monetary policy instruments of the central bank.
China International Capital Corp, one of the biggest investment banking and research companies in the country, said the Big Four in Shanghai lent at rates between 6 and 6.2 percent recently to first-home buyers. The current benchmark rate of loans over five years is 6.55 percent per year.
New lending to households rose 7.8 billion yuan (US$1.3 billion) from a year earlier to 199.1 billion yuan in June.
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