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China’s financial regulators cut the down-payment requirements for first- and second-time home buyers and lowered rates on existing mortgages, in a major move to halt a slump in the country’s residential property market.
The minimum down payment will be 20% for first-time buyers and 30% for second-time buyers, according to a joint statement from People’s Bank of China and National Administration of Financial Regulation on Thursday.
The central bank also approved a rate cut on existing mortgages for first homes, according to the statement.
“The reduction in the interest rate of existing housing loans can save interest expenses for borrowers, which helps expand consumption and investment,” the PBOC said.
Last week, the central government allowed local governments to scrap a rule that disqualifies people who’ve ever had a mortgage – even if fully repaid – from being considered a first-time homebuyer in major cities. At least four major cities have since adopted it.