Chinese banks try to revive housing market with mortgages for 95-year-olds

theguardian.com:

In an attempt to stimulate China’s flagging housing market, banks in some cities are extending the upper age limit on mortgages to between 80 and 95.

Although not a national policy, banks in Beijing, Hangzhou and other big cities have started offering “relay loans” to elderly customers, which pass on to their children in the event that they can’t repay.

Regulators have previously encouraged or enforced lower age limits on borrowing, measured by the formulation of age plus loan period, and usually capped at about 70 years.

But the new offerings, from banks and lenders across several Chinese provinces, include limits of up to 90 or even 100 years. They allow older people to apply for mortgages of 20 or more years, and middle-aged people to apply for mortgages with longer repayment periods.

The products vary in specifics, with some seeming to rope in multiple generations.

Among the banks offering extended mortgage repayment terms, a Beijing branch of Bank of Communications says borrowers up to the age of 70 can take out a 25-year mortgage, as long as it is guaranteed by their children and supported by an inflated minimum monthly income, Beijing News reported.

Netizens are sceptical. “Are you urging people to purchase houses in this way? Extend the mortgage to 80 years old? I am speechless, is there anyone in charge?” wrote one user on Weibo, a Chinese social media platform. Another user accused banks of being “shameless” in encouraging pensioners to take out loans. The number of foreclosures on properties increased by more than one-third last year.

The moves appear to be aimed at reviving China’s slumping housing market. House prices plummeted in 2022, and analysts are divided about how much the sector will recover in 2023.

Confide