China's Ministry of Housing and Urban-Rural Development announced it would raise the Public Housing Fund (PHF) mortgage rates for home buyers beginning Wednesday.

Rate for loans with a maturity of five years or less under the PHF scheme would be raised from 3.33 percent to 3.5 percent, up by 0.17 percentage points, while rates for loans with a maturity of five years or more would be raised from 3.87 percent to 4.05 percent, up 0.18 percentage points.

The PHF mortgage rate hikes comes after China's central bank announced Tuesday it would raise the benchmark one-year lending and deposit rate by 0.25 percentage points each, effective on Wednesday.

Established in the 1990s, the PHF scheme was designed to help medium- and low-income workers to buy homes. Employees are required to contribute 5 to 12 percent of their salaries to the fund, with their employers contributing the same amount.

PHF mortgage loans carry lower rates than commercial mortgages. Bank loans with a maturity of five years or more, for example, now carry a rate of 6.14 percent in China.