Feb. 5, 2010 (China Knowledge) - Bank of China<601988><3988>, the nation's third-largest lender, has cut the mortgage rate discount for first-home buyers to 15% from the current 30%, sources reported.

BOC's rivals, including Industrial and Commercial Bank of China<601398><1398>and Bank of Communications<601328><3328>, still offer the maximum 30% discount on first home mortgages.

The Chinese government allowed banks to offer 30% discount on mortgage rates to first-home buyers in late 2008, in an effort to boost property sales during the global financial crisis.

Housing transactions and prices have surged since March 2009, pushing the government to take a tougher stance since the second half of 2009 to cool rapidly rising property prices in major cities such as Shanghai and Beijing.

BOC said last month that it planned to issue new equity equivalent to as much as 20% of its existing shares and issue up to RMB 40 billion worth of convertible bonds to boost capital.