Only first-time home buyers can enjoy the new mortgage preferential policy, an unnamed official at the banking regulator said on Wednesday, quoting a latest notice.

An urgent notice from the China Banking Regulatory Commission reiterated that the preferential policy only benefits first time buyers using a mortgage to pay for their home, which is for their own use. All other home buyers have to adhere to its former policy on property loans.

The unnamed official from the Shanghai Bureau of the CBRC said the notice has cleared away some of the questions regarding the implementation of the new policy.

Since Monday the People's Bank of China has allowed banks to cut the minimum down payment to purchase a home to 20 percent from 30 percent and has also permitted a maximum discount of 30 percent on the benchmark interest rate, up from the previous 15 percent.

However, the central bank didn't make it clear exactly what type of mortgage applicants can enjoy the new preferential lending rate and the lower down payment.

Because of the uncertainties over the new policy then banks have decided to hold back on implementing it and would rather not be the first to do so.

But the Agricultural Bank of China was the first to post its detailed implementation of the policy on its Website to the public on Tuesday before removing it without reason. However, it became available on its Website again on Wednesday.

The bank said mortgage applicants not buying a property for their own use face the former 30-percent down payment requirement. For the first-home buyer seeking a big home, the minimum down payment is 25 percent, ABC said.

For existing mortgage clients, if their loan is more than 300,000 yuan (US$43,796) and they are paying with the 15-percent interest discount, ABC said it will automatically raise the discount to 30 percent from January 1, next year.

But the bank said that mortgage owners who have defaulted for more than 90 days can't enjoy the bigger discount.

(Shanghai Daily October 30, 2008)