Chong Hing slashes rates for home loan packages
Chong Hing Bank, formerly known as Liu Chong Hing Bank, is offering home loan packages at rates as low as 4.85 per cent for the full term, one of the lowest on offer in the market, after its name change in December.
Other lenders could follow suit with offers of special incentives as they fought for mortgage business but might not cut their pricing directly, market watchers said.
Family-run Chong Hing yesterday launched five mortgage plans for private residential property and government home ownership scheme flats, from floating-rate mortgages to Hibor-linked loans benchmarked on the interbank interest rate.
One of the plans has a mortgage rate of 3.15 percentage points below the prime lending rate or 4.85 per cent for the full term if the loan is HK$800,000 or above. Homebuyers can also have a cash rebate of up to 0.4 per cent of the loan amount.
Some banks offer mortgage plans with interest rates below 4.85 per cent for the first few years of the loan for customers only, or case by case for the full term in designated property projects.
Bank of East Asia has a conditional offer that allows homebuyers to enjoy a mortgage rate as low as prime minus 3.28 percentage points for the first three years and prime minus 3.15 percentage points thereafter. But borrowers must buy three other products from the bank.
Many banks, including HSBC, Hang Seng Bank and Standard Chartered, still offer mortgages at about 5 per cent for the full term.
Peggy Tam Lai-king, the head of secured loans at Hang Seng, said Chong Hing's move was more of a marketing strategy to create public awareness after its name change.
'I don't think it will trigger another price war,' she said.
Donald Cheng Wai-hung, the principal vice-president at mReferral Mortgage Brokerage, said as sentiment in the secondary property market had improved, more lenders would be keen to get a slice of the mortgage business.