China banks drop discounts for first home buyers in Beijing
A man takes bags out from his car at the Central Business District in Beijing July 9, 2009. China's economy probably grew by 7.5 percent in the second quarter from a year earlier, as a burst of government spending and bank lending laid the groundwork for more private sector activity from car buying to home building. REUTERS

China's top five banks have scrapped mortgage rate discounts for first home buyers in Beijing, the official China Securities Journal said on Thursday, as part of efforts to cool a red-hot property market.

Banks had ordered their branches in the capital to drop a 15 percent discount and issue home loans at benchmark lending rates after the Lunar New Year holiday, the newspaper said, citing unnamed bankers at state banks.

Our bank is lending at the benchmark rate of 6.6 percent for loans that extend over five years, a banker at Industrial and Commercial Bank of China Ltd was quoted as saying.

But favourable mortgage rates were still available from some smaller banks in Beijing, such as Shanghai Pudong Development Bank Co Ltd, Industrial Bank Co Ltd and Hua Xia Bank Co Ltd, the newspaper said.

The central government has taken a slew of tightening measures since 2009 to rein in sky-high property prices, including increasing down payments and mortgage rates for buyers of second and subsequent homes.

The down payment minimum for second homes in China is 60 percent of the total value of the property, and banks must charge a minimum mortgage rate of 1.1 times the benchmark lending rate.

The five largest banks in China are Industrial and Commercial Bank of China, Agricultural Bank of China Ltd, Bank of China Ltd, China Construction Bank Corp and Bank of Communications Co Ltd

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