Credit rates rise as banks defy the rules

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  • By Kao Shih-ching / Journalist

Mortgages from local banks rose at a slower pace in August than in July, as demand slowed due to the implementation of new tax policies and lump-sum real estate transactions, data from the Commission showed yesterday. financial supervision.

Mortgages showed monthly growth of NT $ 29.5 billion (US $ 1.06 billion) in August from the previous month to NT $ 8.44 trillion, although growth was 31 percent lower. % to an increase of NT $ 43.2 billion in July, the second slowest monthly growth this year, the data showed.

The lower mortgage growth is likely due to changes to the Income Tax Act (所得稅 法), which impose higher tax rates on gains from the sale of properties within five years. purchase, the commission said. The changes went into effect on July 1, ending real estate speculation, he said.

The central bank’s tightening of credit controls on mortgages could weigh on the growth of new home loans, the commission said.

The commission also said Thursday it had warned local banks not to breach central bank credit checks, after spotting several common breaches among banks during an inspection of 10 local banks earlier this year.

Some banks that offered favorable terms to customers who had taken out multiple mortgages told the commission they did so because customers claimed the new homes were for their own use; However, the commission said that a person was unlikely to live in multiple homes and lenders should have been more careful.

Some borrowers bought and sold properties within a short period of time, indicating real estate speculation, although some lenders nevertheless did not ask borrowers about the purposes of the loans and did not apply a risk control mechanism, the commission said.

Some banks have allowed borrowers to use insurance policies owned by others as collateral for loans to purchase luxury homes, offering loans worth more than 60% of the value of the homes, breaking a rule according to which the loan-to-value ratio of luxury homes to be less than 60 percent, he said.

For clients who took loans to buy land, some banks have not asked borrowers to develop vacant land as planned, he said.

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