By Hao Zhou (chinadaily.com.cn)
Updated: 2007-09-20 15:21

China Merchants Bank and China Everbright Bank's Shanghai branches, as pilots, simultaneously announced a rise in fixed interest rates for housing loans yesterday, the Shanghai Morning Post reported today.

However, other banks' Shanghai offshoots, which have released the house loans with fixed interest rates, said they haven't received the plan to elevate the rates. Nonetheless, new loans will apply the adjusted rate of the central bank.

After the adjustment, China Merchants Bank's benchmark and favorable interest rates for three-year house loans are 7.11 percent and 6.57 percent respectively. Those for five-year house loans are 7.2 percent and 6.75 percent respectively.

Generally, China Merchants Bank's fixed term house loan interest rates have been lifted by 0.27 percentage points, compared with the last time the rates were raised.

Before the rate hike, China Everbright Bank recorded the lowest rate level in Shanghai.

However, according to Everbright's latest rates list, the benchmark and favorable interest rates for less than three years commercial residential houses loans are 6.98 percent and 6.78 percent respectively. The equivalents for three to five years are 7.23 percent and 7.03 percent respectively, and 7.96 percent and 7.76 percent for five to ten years.

According to numbers based on the new interest rate, fixed term house loans won't have much advantage this year unless the central bank raises rates another two to three times.