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More banks ready to trim mortgage rates

MORE banks may cut rates in the growing price war for mortgage business which began last week.

Hongkong Bank, Hang Seng Bank, First Pacific Bank and the Bank of East Asia have all cut rates, and other players say they are reviewing policies to stay competitive.

Bank of America (Asia) president and chief executive, Samuel Tsien said the bank would cut rates by 0.25 percentage point, but had not decided whether the cut would be across the board or in nominated markets.

He said banks for some time had been trying to increase business through various methods, including co-financing property developments with developers and offering renovation loans.

He did not expect mortgage rate cuts would rejuvenate the depressed market.

In contrast, JCG Finance deputy-general manager Chan Hoi-wan believed rate cuts would arouse buyer interest.

'With the slow [property] market, banks need to take action and developers must cut prices,' he said.

He said his firm had no plans to reduce rates, but would evaluate case by case.

Better rates could be offered if the customer had a financially sound background and the loan amount was large.

To remain competitive, Standard Chartered Bank yesterday announced it would offer concessionary rates to all new mortgage customers with immediate effect.

Last week, Hongkong Bank started the price war by allowing branch managers to offer discretionary discounts of a quarter or half a percentage point.

Hang Seng Bank followed by offering a 25 basis point discount to professionals, those who hold key accounts with the bank, and owners of companies which used the bank as their principal bank.

First Pacific Bank announced a discount of 25 basis points off the standard mortgage rate of 10.75 per cent to approved applicants, and Bank of East Asia said it had preferential mortgage terms available, with reductions up to one percentage point.

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