Citic Ka Wah Bank joined the mortgage war by launching a plan that allows customers to use credit cards for monthly mortgage payments, but said it would not cut rates to compete with other banks.
The new promotion means customers can defer their monthly mortgage payment for an extra month by using the bank's platinum credit cards, with a mortgage rate of 2.75 percentage points below prime.
An extra 0.18 percentage point of cash rebate on other card spending would be given if homeowners' new card spending reached 50 per cent or more of its mortgage payment annually. But delayed payment would be charged at an annualised rate of 24 per cent.
Saying the offer targeted borrowers with home loans between $1 million and $3 million, senior vice-president and head of consumer finance and small-enterprise business Florence Pau Wai-sau said the promotion was attractive as the 30-day interest-free payment period helped enhance cash liquidity.
'We'll not directly offer rate discounts to compete with other banks as we believe this is unhealthy,' Ms Pau said.
HSBC recently announced a mortgage rate of 5 per cent.
