SHANGHAI is considering a plan which would allow people to pay a higher percentage of their monthly salary into the local housing fund program, the Shanghai Provident Fund Management Center said yesterday.

"We are proposing that we raise the proportion from the current 7 percent to 8 percent but this still needs to be approved first by the local housing fund administrative commission and the municipality," said Cong Cheng, an official with the center. "The current proportion was set early in 1999 and might not be keeping up with the rapidly escalating house prices."

At present, people covered by the city's housing fund program are allowed to pay between 5 percent and 7 percent of their monthly salaries to the center and their employers are required to match the amount their workers contribute.

For those with larger provident fund accounts, an extra sum of between 1 percent and 9 percent of the monthly salary can be added. However at the end of last year only about 8.8 percent of people covered by the program in the city were benefitting from the larger accounts.

Countrywide, a minimum of 5 percent and a maximum of 12 percent in pay deductions has been set. The savings accumulated from the fund can be used to either buy or renovate homes.

From September 1 last year, individual mortgages issued by the city's public housing fund to families have been raised to as much as a half million yuan (US$71,428).

The city's public housing fund manager now allows everyone in the fund a 200,000-yuan mortgage and each family can have 400,000-yuan credit. People with larger provident fund accounts are eligible for an extra 100,000-yuan mortgage and their families can get loans of up to 500,000 yuan.

Shanghai's public housing fund lent a record amount of 28.79 billion yuan in mortgage last year amid robust housing demand.