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Shanghai suspends loans for home decorations

SHANGHAI: Shanghai has temporarily suspended loans for home decorations under the city's housing fund programme to clean-up unscrupulous practices by some estate agencies, reported Wenhui Daily citing sources from the Shanghai Provident Management Centre.

According to the report, the management centre has already stopped offering such loans since this week, as more agencies have been exposed of charging extra money — between 3,000 yuan to 5,000 yuan (RM1,381.18 to RM2,301.97) — for either helping unqualified clients get loan approval from the centre or helping them receive more loans than they are qualified for.

Mortgage rates under Shanghai's public housing fund is said to be more favourable compared to housing funds offered by commercial banks, as the interest rate for mortgages longer than five years under the public housing fund is 3.87% while the commercial bank has a standard rate for mortgages of the same period at 5.94%.

In Shanghai, the ceiling of loans for home-decoration purposes is currently 300,000 yuan.

Under the public housing fund system in Shanghai, employees pay 7% of their monthly income to the fund and their employers would need to match the amount. Employees can also pay an extra 1%-8% of their monthly salary to the fund and their employers must also match the amount.
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