The US subprime crisis will have limited impact on China's mortgage market, but it has raised the need for stricter examination of individual credit and higher down payments, insiders said.

The US subprime issue has had almost no impact on China's mortgage market, said Li Ling, general manager of the examination and approval department at the Shenzhen Development Bank (Beijing branch).

"In fact, measures taken last year to address increasing risks in the market had already seen our loans to real estate developers shrink by almost half in the past year," Li told China Daily. "They now account for a very small proportion of our business."

Mortgage down payments currently range from 20 to 30 percent, but in real terms they are 10 percent or even zero given the inflated prices, Li said.

Property prices in the country's 70 large and medium cities rose by 7.5 percent year-on-year last month, the highest growth rate since 2006 and 0.4 of a percentage point higher than for June.

"Increasing down payments is a must," Li said.

The Shenzhen branches of some banks raised the down payment from 30 to 40 percent and put a stop to mortgages on pre-owned houses last week.

Shenzhen prices increased at a rate of 16.1 percent for new houses and 21.4 percent for pre-owned homes in July, leading the country's property price growth, the National Development and Reform Commission said.

"We might see more increases in Beijing, but down payments could differ according to the client's credit background," Li said.

According to Tao Dong, chief economist with Credit Suisse First Boston Asia, the US subprime issue sounds a warning bell for China's mortgage market.

"Banks should be more careful and cautious in examining the credit of homebuyers," Tao said.

Peng Xingyun, a researcher with the Financial Research Institute of the Chinese Academy of Social Sciences, called for stricter supervision and risk management of the country's mortgage market.

"China's mortgage market has shown some features of the US subprime crisis, as property prices keep rising and the interest rate goes up," Peng said.