Jane Chen / Shanghai Daily news

Individuals who default on mortgage loans will have to pay fines up to 50 percent more than the current level from next year, as banks mark-up the rate of interest on defaults, today's Oriental Morning Post reported.
The move comes on the heels of a new regulation from the central bank, which orders bankers to increase the default rates by 30-50 percent.
China Construction Bank, the Agricultural Bank of China and the Bank of Shanghai have announced the raising of daily rates by 30 percent from the current equivalent of 0.021 percent of the stated mortgage rate, and the Industrial and Commercial Bank of China will increase it by 40 percent. The Bank of China intends to raise rates by 50 percent.
Despite the increases, market analysts pointed out that the resulting additional fines will not amount to a hefty sum.
Taking the largest increase of 50 percent as an example, the resulting yearly default interest rate of a current under-five-year mortgage at 5.508 percent is 8.262 percent, or a daily rate of 0.02295 percent, compared with the existing 0.021 percent. 
That means the default interest for a borrower repaying  3,000 yuan (US$372) monthly, 1,800 yuan as principal  and 1,200 yuan as interest, will not exceed 100 yuan per month.
Rather, by increasing the cost, the banking authority aims to warn loan borrowers against default and therefore reduce bad loans, market analysts said.
They revealed that the fines will be recorded in defaulters' personal credit histories and that they may encounter difficulty borrowing in the future.