FOR homebuyers who are going to purchase their first properties, the mortgage rates have now been raised to a new high. Several major commercial banks in Shenzhen announced they would be raising mortgage rates for first-time homebuyers, the Southern Metropolis Daily reported.

Four State-owned banks, along with Bank of Communications and China Merchants Bank, raised mortgage rates by 15 percent on the basis of the benchmark rate for homebuyers’ first apartments.

Meanwhile, China Minsheng Bank increased the rate for first properties by 20 percent, and China Everbright Bank raised the rate by 30 percent.

Banks have also raised the mortgage rates for second properties. China Merchants Bank, for example, has raised the rate by 20 percent.

A staffer from Bank of China’s Shenzhen branch said that although the bank kept the mortgage rate increase for first properties at 10 percent as before, the rate might be increased by 15 percent in real practices due to a large demand of loan requests.

The increase of mortgage rates for first apartments means that homebuyers will face larger monthly mortgage payments.

Taking a small apartment valued at around 3.5 million yuan (US$515,874) with a 30-year mortgage as an example, homebuyers would need to pay an extra 1,100 yuan a month if the rate were raised by 15 percent on the basis of the benchmark rate, and an extra 1,500 yuan if the growth were 20 percent.

According to a person from a State-owned bank, the bank he works for is no longer issuing loans based on benchmark mortgage rates, but on each client’s situation.

Borrowers who tend to pay back loans late will have higher mortgage rates. The Shenzhen branch of China Construction Bank said that borrowers who have been late on payments five times will see mortgage rates increase by 25 percent.

(Zhang Qian)