February 9, 2011 / 6:23 AM / 9 years ago

China raises mortgage rates for housing fund

BEIJING, Feb 9 (Reuters) - China on Wednesday increased the cost for people borrowing from a fund designed to support first-time home buyers, in line with the country’s latest rise in benchmark interest rates.

Mortgage rates for housing provident fund loans of more than five years rose to 4.50 percent from the previous 4.30 percent, the Ministry of Housing and Urban-Rural Development said in a statement on its website.

The Chinese central bank raised benchmark one-year deposit and lending rate by 25 basis point on Tuesday for the third time since October to tame inflation. [ID:nTOE706030]

The rate for mortgage loans of five years or less from the housing provident fund increased by 25 basis points to 4.00 percent, the housing ministry added.

Apart from higher mortgage rates, China has also issued a slew of other measures to rein in property price rises, including higher required downpayments and a trial of property taxes in Shanghai and Chongqing. (Reporting by Langi Chiang and Simon Rabinovitch; Editing by Ken Wills)

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