News Centre Media Response Background Timetable Photo Gallery Webcast About Tianjin  Home  Chinese(GB)  
 
38.Fixed-rate low-interest loan: China’s first house saving bank provides new service to home buyers
http://www.tj-summerdavos.cn    2008-09-19 11:53

Mr. Shen, who is working in Tianjin, plans tobuy a commercial apartment recently. Aftercomparing the mortgage business of severalbanks, he found the solution of Sino-GermanBausparkass (SGB) the most attractive: thefixed rate low-interest loan could allow himto raise and arrange his fund easily and savemoney at the same time.

When the real estate market has been on therise over the past few year, the housing pricesin many Chinese cities are growing much fasterthan the residents’ pay raise. At the same time,the housing loan interests keep rising and thehome buyers have been placed under greaterpressure to pay back the mortgage to the bank.Under the circumstances, the housing savingproducts, with characteristics of loan after saving,fixed rate and closed operation, must havea potential market.

SGB was co-established by China ConstructionBank (CCB) and Germany BausparkasseSchwabisch Hall AG Bank, the largest housesaving bank in Europe. The joint venture nowhas been the first and only house saving bankin China.

At present, residents can apply housing mortgageby three means, or personal housingcommon reserve fund loan, personal housingmortgage and personal housing combinedloan with common reserve fund loan. Of thethree types, the interest rate of personal housingcommon reserve fund loan is comparativelylow and that of personal housing mortgage isrelatively high with 7.38 percent annual loaninterests for five-year mortgage or longer.

As a brand-new personal housing financingoption, housing saving has arrested the attractionof the home buyers with its super low loaninterest, which can be as low as 3.3 percentyearly. What the clients can benefit directlyfrom the scheme is to pay less loan interests.

The housing saving is a deposit with special purpose.The clients taking part in the scheme aimto obtain low-rate housing loans. It requires thatthe clients deposit fund firstly, which will makecontribution for the whole group before theycould enjoy the low-interest housing loan in thefuture. The fund that will be used for housingloans is accumulated by the depositors, whichis mainly composed of the saving and mortgagepayment of the depositors.

The SGB acquired the license from State Administrationfor Industry & Commerce in February2004. The bank launched a series of newproducts on fixed rate housing mortgage inNovember 2006. In June 2008, the bank againintroduced a new product to shorten the waitingtime of the clients to get home mortgage.The industrial analysts said the mode of housingsaving bank would help depress the inflation.Its requirement of “saving firstly for loan”will transfer the capital for short-term depositor consumption to long-term housing savingfund. Meanwhile, that deposit will be speciallyused for home mortgage, which could transformthe short-term fund to long-term investment,which could also reduce the impact ofshort-term money market to the inflation.

Germany Bausparkasse Schwabisch Hall AGBank is the largest and most successful professionalbank on house saving in Europe. Its jointventures in other European countries outsideGermany have all taken leading positions in thehousing financial markets. The SGB will spreadits business to other Chinese cities from Tianjinin near future.

The founding of the bank was a great effort ofChinese and German governments and executivesof the two investing partners. Differentiatingit from other economic projects, the bankcould mirror the cooperation of Chinese andGerman governments in the fields of nationaleconomy and social security system, which willhelp the fulfillment of the target of “harmonioussociety” advocated by Chinese government.


From:Enorth.com.cn    Editor: Zhao Jing
 
Preparatory & Coordination Committee of Annual Meeting of the New Champions 2008