BEIJING, Oct. 15 -- China banking authorities have fixed three basic criteria defining the "second home" as a guideline for commercial banks to raise the down payment for second-home buyers.

The People's Bank of China, along with the China Banking Regulatory Commission, last month announced a new mortgage policy to try to curb surging property prices, in which it raised the mortgage down payment for second-apartment buyers to 40 percent from 30 percent. Meanwhile, the mortgage rate for second homes has been set at 1.1 times the benchmark one-year lending rate.

But banks across China are still trying to determine the policy definition of a second apartment, with some in many cities suspending transactions on ambiguous deals, for fear of being penalized.

According to the "Three Basic Lines" reached by the country's top five commercial banks at a meeting Friday, first, a loan from the personal provident fund will not be taken into account when judging a second-home mortgage. Second, a borrower who has paid off all his previous home loans will be considered a first-home buyer. Third, a transaction by a home loan borrower's spouse will be defined as a second-home purchase.

Insiders said details of the new mortgage policy to be implemented by different banks are expected this week.

(Shenzhen Daily)