China's Public Housing Fund (PHF) has raised mortgage rates for individual house buyers by 0.18 basis points effective from May 8.

The annual interest rate for loans with a maturity of five years or less will rise 3.96 percent to 4.14 percent, the Ministry of Construction, the supervisor of PHF, said on its website Saturday.

Mortgage loans with a maturity of more than five years will now carry an annual interest rate of 4.59 percent up from 4.41 percent.

A day earlier, China's central bank raised the benchmark lending rate for one-year loans by 0.27 basis points from 5.58 percent to 5.85 percent.

The rate for deposits remains unchanged.

The PHF was established in the 1990s following the reform of the housing system in China.

The PHF was designed to help medium- and low-income earners to buy houses. Employees are required to contribute 5 to 12 percent of their salaries to the fund, with their employers contributing the same amount. PHF mortgage loans carry lower rates than commercial mortgages.

The lending rate hike by the central bank is aimed at preventing the economy from overheating, in response to rapid expansion of loans and fixed-asset investment in the first quarter.

Central bank officials said they hope the hike will help stop housing prices in major Chinese cities from soaring further.