Competition in the home loan market is set to intensify, but banks, especially the big players, are likely to offer lower rates only selectively to defend their market share instead of cutting rates across the board, analysts said. 'It cannot be ruled out that some banks will cut mortgage rates further due to low funding costs at the moment,' said a veteran local banker. 'But the magnitude will not be too big since current mortgage rates are very low.' Bank of East Asia yesterday cut its mortgage rate by 25 basis points to 2.25 and 2.5 percentage points below the prime lending rate, or 2.75 to 3 per cent in real term. It also relaxed its mortgage terms, with the combined property age and repayment period being extended to 70 years from 50 years, but the maximum repayment period of 30 years remains unchanged. BEA's prime rate now stands at 5.25 per cent. Lenders might cut mortgage rates to as low as 2 per cent in the second half from about 2.5 per cent due to ample liquidity in the banking system, said mReferral Mortgage Brokerage last week. Many banks already have cut their rates for conventional mortgages by more than 50 basis points since early this year. Others introduced fixed-rate or interbank rate-related mortgage products to guard against the vagaries of interest rate cuts. The mortgage rate for conventional home loans at some small and medium-sized banks, such as Citi Bank and Bank of Communications, recently stood at 2.4 per cent and 2.37 per cent, respectively. Banks such as HSBC and Bank of China (Hong Kong) still maintain their board rates at more than 3 per cent. The veteran banker said banks were trending to cut mortgage rates 'under the table' instead of trimming rates across the board. Market watchers said HSBC had offered mortgage rates as low as 2.2 per cent for some customers, while BOCHK provided a similar preferential rate to some homebuyers, even though their board rates remained unchanged. An HSBC spokesman said its board rate remained unchanged at 1 to 1.5 percentage points below prime, or 3.5 to 4 per cent in real terms. 'We have no plans to change this for the time being but, as always, we will continue to closely monitor market conditions,' she said. 'Our mortgage offers are determined on a case-by-case basis, taking into account the customer relationship.' A spokesman at BOCHK also said its board rate for mortgages remained as low as 1.5 percentage points below prime, or 3.5 per cent in real terms. Peggy Tam Lai-king, head of secured loans at Hang Seng Bank, expected more banks would offer 'personalised pricing' to customers, depending on their situation, instead of cutting mortgage rates across the board. Typically, such pricing depends on customers' total relationship with the bank, their repayment ability and the quality of the property. 'Banks will face pressure to reprice their existing mortgage portfolio lower if they cut prices across the board,' she said. Stanley Wong Yuen-fai, an executive director at ICBC (Asia), said the probability of banks making big cuts in mortgage rates was small, since rates were already close to their historic low levels of 2004 and 2007 in relative terms.