Money

Properties used as collateral for 3rd home loans

(Agencies)
Updated: 2010-09-07 14:21

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Some banks in Shanghai are extending loans to individuals for third-home purchases if they use one of their properties as collateral, the China Business News reported Tuesday.

The property used as collateral must have no loans or the loans are paid in full, the report said.

The down payment should be no less than 55 percent of the total cost of the third home and interest rates would be between 10 percent and 20 percent, higher than the benchmark lending rate, the newspaper said.

Such moves should be banned as it violated related regulations for third home loans, the report said, citing an anonymous banking insider from Shanghai.