Recently, market rumors claimed that several banks in Beijing had raised interest rates on first mortgages for second-hand homes, tightened mortgage quotas, and that loan discounts had “vanished.” Our reporter's visits found that currently among the five major state-owned banks, apart from Bank of Communications, which raised the interest rate on first mortgages for second-hand homes in Beijing by 5%, the four banks including Bank of China, Agricultural Bank of China, Industrial and Commercial Bank of China, and China Construction Bank all maintain the benchmark interest rate, though their statements on the tightness of loan quotas and disbursement speed vary; some banks say there is still room for discounts depending on clients' credit conditions.

 

　　“Bank of Communications currently charges 5% above the benchmark rate and has long had no discount offers,” said a staff member at the Bank of Communications Beijing Dongdan Sub-branch, noting that quotas are now relatively tight and disbursement is very slow.

 

　　Besides Bank of Communications, Bank of China, Agricultural Bank of China, Industrial and Commercial Bank of China, and China Construction Bank in principle apply the benchmark interest rate to first-home mortgages in Beijing, but apart from ICBC, which says it “has long had no discounts,” CCB, ABC, and BOC say there is still room for reduction. Among them, CCB explicitly stated that it can still offer a 10% discount to high-quality customers.

 

　　A client manager at the personal loan center of the Agricultural Bank of China Beijing Xicheng Sub-branch said that if a customer has a good credit record and a high score, the loan interest rate can be reduced, but the amount of the reduction is “hard to say” and will be handled on a differentiated basis according to specific circumstances.

 

　　Bank of China said it has been stricter about discounts over the past two months. “Even if a 5% discount is applied for, it will still be executed at the benchmark rate once approved, though some sub-branches may have cases of a 5% discount,” a staff member at the Bank of China Beijing Financial Street Sub-branch said in an interview with the reporter.

 

　　Regarding the tightness of loan quotas and the speed of lending, among the five major banks only Bank of Communications and China Construction Bank said quotas are tight. “Disbursement takes at least three months, and quotas have been relatively tight recently,” said a staff member at the China Construction Bank Beijing Xisi Sub-branch, adding that disbursement speed cannot be guaranteed.

 

　　Bank of China, Agricultural Bank of China, and Industrial and Commercial Bank of China said quotas are normal and loans are issued according to procedure. “The quota issue is not a big problem in the second quarter,” said a staff member at the Bank of China Beijing Financial Street Sub-branch. “From the in-person signing and complete documentation, it takes about one month, and after the transfer and mortgage are completed, disbursement can be made in one to two weeks.”

 

　　Nationwide, apart from Beijing, most banks have since the beginning of this year canceled mortgage rate discounts and become stricter in approving real estate-related loans. The latest mortgage data released by Rong360 shows that among the 35 sample cities, 25 cities have seen loan suspensions, accounting for more than 70%, with small and medium-sized commercial banks mainly responsible for the suspensions.

 

　　Industry insiders say that banks' cancellation of loan rate discounts or even increases shows that their willingness to issue real estate loans is “cooling,” and this situation is related to each bank's risk control efforts and adjustments to loan policies.

 

　　“Each bank's business strategy is different, but compared with personal consumer loans and corporate operating financing loans, personal housing loans are now less advantageous. First, the term is long, generally taking 20 to 30 years to recover; second, profits are still relatively low,” said a business staff member in the credit department of a state-owned bank, adding that based on risk control considerations in the real estate market, it will be difficult for banks' willingness to issue personal housing loans to “heat up” in the short term.