(ECNS) -- Eight major banks have eliminated discounts on mortgage rates for first-home buyers in Beijing, effective from May 1, amid new efforts to cool down the real estate market.
The banks, including Industrial and Commercial Bank of China and China Construction Bank, also hiked mortgage rates for second-home buyers at 20 percent higher than the benchmark interest rate, also effective from May 1.
The move follows previous measures to raise housing loan interest in the capital.
A bank insider told Beijing-based newspaper China Times that real estate agents were already told that more banks would tighten mortgage restrictions.
Data showed average discounts on mortgage rates for first-home purchases in Beijing during April was 7.3 percent and the average interest rate 4.54 percent. Among the 30 banks monitored, 18 offered a discount of 5 percent.
Data at national level also showed a clear tightening of discounts on mortgage rates with many banks in first-tier cities changing from 10 percent to 5 percent.
Analyst Li Weiyi said house purchases now need more down payments and shoulder heavier loan interests that drive away property speculators.
