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Thread: Mortgage rate to rise to prevent credit crisis!

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[quote=DREAMLIFE,248008]According to a source, the central bank may raise the interest rate of  mortgage loans to 1.1 times the benchmark one-year lending rate this week. This move aims to curb the soaring house prices and speculation in the property market.

On September 13, the interest rate for five years lending was raised to 7.83%. If the central bank really makes this move, the interest rate will reach 8.613%. What's more, the central bank is likey to raise the mortgage deposits to 40% for those who want to buy their second apartment, and for apartments for commercial use, the down payment will be raised to as high as 50 percent. The minimum deposit for an apartment of more than 90 sq m is currently 30 percent while for apartments less than 90 sq m it's 20 percent.

Meanwhile, those commercial banks are required not to lend money to property developers who hoard land and house for speculation purposes.

Why does central bank make this move, just only to curb the soaring house prices and speculations in the property market? More seriously, the central bank tries to prevent such a credit crisis which has caused great damages to US economy. Such a hit is vital. China should learn some lessons from the credit crisis outbroke in US.

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