BEIJING China's banks in some big cities have started to lower discounts on lending rates for fist-time home buyers, the China Securities Journal reported on Thursday, joining recent steps to curb financial risks stemming loose credit conditions.
Since the start of 2017, banks in Beijing have started discounting mortgage rates as much as 10 percent off the official benchmark rate, reducing from as much as 15 percent previously, the newspaper said on its website.
The current one-year benchmark lending rate set by the People's Bank of China is at 4.35 percent, the lending rate for loans up to five years is at 4.75 percent and loans longer than 5 years is at 4.9 percent.
Few lenders in Beijing and Shanghai still offer mortgage rate discounts more than 10 percent off the benchmark, it said.
"There are indications that the financial environment for the property market will no longer be loose in 2017," it said.
In the southern city of Guangzhou, the Postal Savings Bank, Industrial Bank and Rural Commercial Bank have also adjusted discounts on mortgage rates to as much as 10 percent off the benchmark rate from as much as 15 percent, the paper said.
Banks in Guangzhou have been told by regulators to tighten screws on mortgage lending in light of a ramp up in new loans in January, the paper said.
Chinese banks may have doled out 2.3 trillion yuan ($334.88 billion)in new loans in January, the second highest monthly tally ever and building off last year's record lending, according to a Reuters poll.
Chinese banks usually "front load" loans at the start of year in order to maintain their market shares.
Last week, the central bank surprised markets by raising interest rates on its reverse repurchase agreements (repos) and standing lending facility (SLF), signaling a tightening policy bias over the coming year.
That followed a move in late January to raise rates on its medium-term loan facility (MLF).
The central bank hopes higher funding costs could help contain credit growth amid fears of asset bubbles and financial risks, analysts say.
(This story has been refiled to correct typographical error in seventh paragraph)
(Reporting by Kevin Yao; Editing by Shri Navaratnam)