BANK of China is the first of the country’s big four lenders to confirm the implementation of eased mortgage measures for homebuyers, according to a statement Friday.

    The bank has been following the new measures, which were first formally introduced Sept. 30 in a joint announcement by the People’s Bank of China, the central bank, and the China Banking Regulatory Commission, since Oct. 1.

    The mortgage rule easing has expanded the pool of eligible homebuyers applying for mortgage loans and increased the amount they can borrow by categorizing second homebuyers, who have fully repaid existing loans as first-time homebuyers.

    According to the announcement, mortgages on a second home will be treated as a first mortgage if the buyer has no other outstanding mortgages. As a result, people who wish to buy a second home will enjoy the same 30 percent down payment ratio required of first-time homebuyers, instead of the original 60 to 70 percent down payment ratio.

    They will also be allowed interest rates as low as 70 percent of the 6.55 percent benchmark mortgage rate, instead of paying a 10 percent premium on top of the benchmark rate as required previously.

    Bank of China said it has authorized branches nationwide to decide on the implementation of these measures based on risk assessment, for instance, the discount of the mortgage rate.

    In cities without home purchase restrictions in place, Bank of China branches had the discretion to determine down payment ratios and mortgage rates when people with two or more homes buy a new home, as long as they have no other outstanding mortgages, it said.

    Currently, only the four first-tier cities of Beijing, Shanghai, Guangzhou and Shenzhen still impose home purchase restrictions. (Xinhua)