Home buyers in Shanghai will soon enjoy fixed-rates on mortgage loans to lessen the potential for default, today's Shanghai Oriental Morning Post reported.
The Shanghai Pudong Development Bank is preparing to offer 5-year fixed-rate property loans, so despite bank rate fluctuations over the five years, clients will pay the same rate of interest. After the five years is up, the bank will negotiate a new rate with their clients.
"We have got approval from the central bank and are now  waiting for the go-ahead from the Chinese Banking Regulatory Commission," said Zhang Yaolin, vice-governor of the bank.
"We are waiting for the right market conditions to offer the loans, and now is not the right time with the Consumer Price Index (CPI) trending downward and no strong market sentiment that the banks will raise interest rates," Zhang pointed out.
China Everbright Bank and China Construction Bank were also given the go-ahead from the central bank to offer such loans.
Property loans account for around 70 percent of the total personal business conducted by Shanghai Pudong Development Bank. "Property loans increased quickly in the first half of this year, but the rate of increase slowed from June to September due to the government macro-adjustment policies," Zhang said, adding that further increases are expected over the final two months of the year.