BEIJING, Nov. 4 (Xinhua) -- The Bank of Communications (BOC)' Beijing branch has recently given its own definition of a "second" mortgage, which will base on the house property of the applicant rather than the applicant's family.

"In Beijing, we will examine whether the loan applicants, either individual borrowers or co-borrowers, are trying to buy a second apartment," said Zhang Xin, an official in charge of the credit management with the BOC's Beijing branch.

"If any of the co-borrowers already has a house mortgage that hasn't been paid off, his new loan application will be considered as a 'second' mortgage. It means he will have to face a higher down-payment and interest rate," Zhang explained.

But he stressed that his bank will not check whether the applicant's spouse has already had an apartment unless the spouse is registered in the lending account as a co-borrower.

"Co-borrowers can be couples, parents and children, and sometimes even people of no kinship," he said.

What is a second mortgage has been a topic of controversy after the central bank decided to raise mortgage deposits for homebuyers who intend to buy a second apartment, a move aiming to curb speculation on property transactions.

In late September, the People's Bank of China, the central bank, and the China Banking Regulatory Commission jointly issued a new rule that requires mortgage holders who apply for another home loan to put a down-payment of at least 40 percent and pay a 10-percent premium on their interest rate.

For people seeking a third or fourth mortgage, the down-payment requirement and interest rate is even higher, with specific figures determined by commercial banks.

A hot debate has since been going on, as the regulators did not define a "second" mortgage, such as whether it regards a borrower and his family members as a whole unit or whether a borrower's families are immune from the new rule.

The authorities have left the right of definition up to banks themselves, since their situations on loans and local real estate markets differ, analysts said.

Lenders like China Construction Bank and Bank of China have taken a tougher line. They define a "second" mortgage based on the family unit, which means if, say, the husband has already applied for a mortgage and the wife applies for a new loan on another property they will have to offer a 40-percent down payment according to the new rule.

However, the BOC decided to allow its local branches to make their own definitions instead of giving a definitive definition.

"We have studied the new rule carefully. A second mortgage based on the individual or the family does not collide with it. Thus, we let local branches set their own standards of their practical needs to tighten supervision and prevent financial risks," said Qian Wenhui, vice president of the BOC.