Bank of Communications said yesterday that only new first home buyers of a normal property can enjoy a recent preferential mortgage policy.

It said that since yesterday, new first home buyers applying for a BoCom mortgage for a normal home can enjoy a 30 percent maximum rate discount off the benchmark lending rate and a minimum down payment of 20 percent.

Shanghai's new criteria for common property took effect from Saturday.

An apartment in the city's Inner Ring Road costing less than 2.45 million yuan (US$358,293) and with an area smaller than 140 square meters will be defined as normal housing.

A home between the Inner Ring Road and the Outer Ring Road should not cost more than 1.4 million yuan while a flat located outside the Outer Ring Road should not cost more than 980,000 yuan.

BoCom didn't comment on the issue for existing clients.

Only first-time home buyers can enjoy the new mortgage preferential policy, an unnamed banking regulatory official told Shanghai Daily last week.

The People's Bank of China has allowed banks to cut the minimum down payment to 20 percent from 30 percent since October 27. The maximum discount off the benchmark rate was also doubled from 15 percent to 30 percent.

The Agricultural Bank of China has been the first bank so far to disclose detailed implementation of the new policy when it said mortgage applicants buying a property for commercial use will still face the 30 percent down payment. For the first-time home buyer seeking a non-normal home, the minimum down payment is 25 percent.

(Shanghai Daily November 4, 2008)