Bank of China will not suspend extending mortgage loans to second-home buyers, who haven't paid off the loans for a first purchase, BOC spokesman Wang Zhaowen said yesterday.

Wang was denying a recent CCTV report which has agitated the real estate market with the fear that the market will shrink because of loan reductions.

In the report, You Zhishan, director of the Chaoyang division of BOC's Beijing branch, said the bank, to control the rising risk of home loans, has ended loans for second homes, particularly luxury projects.

Chaoyang District is home to Beijing's high-end property projects.

Despite the denial, the BOC spokesman acknowledged that the bank,in line with a requirement from the nation's banking authority, will not change its cautious attitude to home loans, today's Beijing Youth Daily said.

At an interior work conference early this month, BOC stressed strict control of loans to luxury property projects and investment purposes. It will expand the ratio of loans to help buyers of the government sponsored economy projects and business booths.

The central bank circulated document No. 121 last June to announce a series of measures to limit loans to luxury homes and villas in a bid to control the banking risk amid the soaring housing market.

Source: Xinhua