Analysts estimate that nearly $700 billion of mortgages – close to one-eighth China's outstanding total – have been prepaid since early last year, when banks started to lower borrowing rates. This threatens banks' profits on mortgages, which accounted for about 30% of outstanding loans at China's five biggest banks as of last June, according to their latest financial reports. The current disinterest in new home purchases contrasts sharply with the overheated property market of prior years, when authorities kept mortgage rates high to cool speculation. Towards the middle of last year, however, regulators began lowering benchmark mortgage rates to prop up property demand, after a liquidity crisis among developers sent home prices and sales into a downward spiral. "I decided to do so because I'm burdened with a mortgage rate that's too high," Wang said.

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