Wuxi cuts mortgage rates for first-time homebuyers

Banks in Wuxi, Jiangsu province have cut the mortgage rate for first-time home buyers to below 4 percent, financial news provider CLS reported on Wednesday.

CLS said some banks in Wuxi have lowered the mortgage rates for first-time buyers from 4.1 percent to 3.8 percent, and they can apply for home mortgages at the lowered interest rate from Wednesday.

The mortgage rates for second-home buyers remains unchanged at 4.9 percent, according to CLS.

The reduction in mortgage rates came as China announced in January the establishment of a mechanism that allows local governments to adjust the regulatory floor of mortgage rates upon changes in local home prices, as part of its stepped-up efforts to promote steady and healthy development of the property market.

Under the mechanism, cities where new home prices fall for three months in a row on both a monthly and yearly basis are allowed to temporarily maintain, lower or cancel the local lower limit of mortgage rates for first-time buyers, the People's Bank of China and the China Banking and Insurance Regulatory Commission said in a joint statement in January.