BoCom Beijing branch defines 2nd mortgage
Bank of Communications’ Beijing branch has announced its own understanding of a second mortgage under controversial new rules, the Oriental Morning Post reported. Under the bank’s definition, if either the applicant or “co-borrowers” of the applicant already have a mortgage that has not been paid off, the new loan application will be considered a second mortgage and require a 40% down-payment and a 10% interest rate repayment, Zhang Xin, an official in charge of credit management at the branch said. These “co-borrowers” could be “spouses, parents, children, and even people with no blood connection,” Zhang said. Defining a second mortgage has been controversial following the central bank’s announcement on September 27 that a second-home mortgagee would be required to make a 40% down-payment and meet at least a 10% interest rate in the future.