December 11, 2007
China’s Lending Rates — 5+ Year
Here’s a look at long-term lending rates in China since 1996 (anything over five years is long-term here). The worldwide boom in energy, metals, and other commodity prices can mainly be attributed to the economic boom in China — stimulated by super-low long-term rates in the 2002 - 2004 period, yes? When crude was $10.35 a barrel in 1998, long-term rates here were 10.35%. :-)
When we bought out apartment here in 2005, the home loan was 6.12%. Home loans reset annually so our loan has moved up to 6.84% and will reset to 7.83% at the end of this year. No such thing as a fixed-rate 30-year home loan here!
Cat: | Time: 8:58 pm (utc+8)
December 12th, 2007 at 12:06 am
Yes, interesting. Could the current direction mean that Jim Rogers is just talking his book again?
December 12th, 2007 at 12:41 am
why not start a 30yr fixed rate lending company there?
December 12th, 2007 at 7:43 am
So where does runaway inflation put you? i.e. can you prepay or refi using outside resources?
December 12th, 2007 at 8:32 am
@yo: I’m not sure what you mean.
@pete: Good luck getting a license to do that.
@stan: Yes, you can prepay but you can’t refi with any outside resources because they don’t exist.
December 12th, 2007 at 4:20 pm
was the low of 5.75% “super-low” ? Low compared to the fed funds low of… 1% ? The CNY interest rate, as in most countries and up until about now, followed the fed.
December 12th, 2007 at 4:35 pm
GZH: I meant super-low in relation to the 15.21% of just a few years before … we all know what the Fed has wrought in terms of global boom… and bust.
December 13th, 2007 at 11:47 am
Taking out loans from foreign banks like Citi or HSBC on dollars terms would be a good idea, wouldn’t it? Or they change reset the loan amount each year based on Yuan exchange rate?
December 13th, 2007 at 12:07 pm
werdna: I don’t understand your question. You mean taking out a dollar-denominated loan from a foreign bank to do what? Buy a house? I’ve never thought about such a thing so I don’t know if it’s possible or at with what rates and terms if it is possible. We sourced our CNY loan from ICBC, Industrial and Commercial Bank of China.
December 14th, 2007 at 5:04 am
Citi and HSBC do offer home mortgage in US dollar in China - only for foreinger. Try this link:
http://www.citibank.com.cn/CNGCB/APPS/portal/loadPage.do?tabId=Loans&path=/prod/det/mortgageloan.htm
I am not clear about the detailed terms though.