New high-rise apartment in China. Photo: iStock
New high-rise apartment in China. Photo: iStock

The Big Four state-owned banks in Guangzhou will raise the interest rate on first home mortgages by 10% as of Thursday, while the second home mortgage will go up 15% to 20%, 21st Century Business Herald reported.

The Big Four, including the Bank of China, the China Construction Bank, the Agricultural Bank and the Industrial and Commercial Bank of China, hold more than 80% of housing loans.

The benchmark interest rate is 4.9%. At present, 1.1 times the benchmark has become the mainstream mortgage interest rate not only among the Big Four, but also other banks in Guangzhou.

The Bank of East Asia has adjusted the rate to 1.2 times the benchmark, while the China Minsheng Bank has not yet made any adjustment to the mortgage interest rate. The Zhuhai Huarun Bank, however, still offers a 10% discount for people’s first home mortgage.

“It is normal for banks to raise the mortgage interest rate, since banks’ credit limit is very tight, but it wasn’t expected to be this fast,” said a general manager in a mortgage agency in Guangzhou.