Banks are offering fixed-rate second mortgage products to lure homebuyers as interest rates rise.
So far two institutions - the Bank of East Asia and DBS Bank - have announced flexible mortgage plans to allow borrowers to 'lock in' part of their interest rates.
'As interest rates have risen one percentage point since March, the fixed-rate mortgage plan will attract borrowers' interest,' said Ivan Lo, deputy chief executive of mortgage broker mReferral.
He said the fixed-rate second mortgage product would become another battlefield for banks to compete for customers.
Bank of East Asia launched mortgage financing of up to 95 per cent, which included a first mortgage of 70 per cent of the appraised property value and a second mortgage of up to 25 per cent.
Fixed rate for the second mortgage of two years is 2.98 per cent a year. The annual rates offered on terms of three or five years are 3.38 per cent and 3.98 per cent, respectively.
The product is offered in conjunction with the Hong Kong Mortgage Corp.