Mortgages in Hong Kong

[Speed Weasel]

Hey guys,

Just wondering wondering what kind of mortgages people have been able to negotiate in Hong Kong recently and what lending institutions are the best to deal with.

Thanks,

S.W.

[777300ER]

Avoid Standard Chartered Bank at all costs....

[superfrozo]

92% mortgage
Prime-3% for 3 years (then prime - 2.88% for remainder)
$50,000HKD "lai see" credited to Visa
6 months free contents insurance.

Which Bank? No,not Commonwealth - HSBC believe it or not.
After being told to go with "anyone but" it came as a pleasant surprise that HSBC's offer was streets ahead of Standard Chartered & Bank of China.

It does seem that most banks are bending over backwards right now to get your mortgage business, so shop around!:ok:

[christep]

Agreed - the HSBC deal seems pretty good to me. I've just got a similar one, although only a 70% mortgage (because that's all I needed). 1% credited back to my credit card. 4.75% for the first two years, 4.87% after that, defined as prime-3 and prime-2.88, but different banks have different "primes" so you need the absolute figures to compare. Plus some deal on the insurance (something like 6 months on contents, as per superfrozo).


I think you have to be an HSBC Premier customer to get some of this though...

[dogleg]

Not trying to hijack the thread, but I would love to hear the arguments for the owner-occupier variable vs fixed options WRT the CX housing policy.
Since it seems reasonable payraises are not forthcoming, making good decisions on matters such as this just got even more important...
Thoughts, opinions, anyone???

[superfrozo]

Dogleg - a worthy "hijack" topic if ever there was one..!
This topic always causes interesting debate and let's face it, is affected by dozens of variables, but I reckon it boils down to your individual risk threshold.

I haven't "NC"ed the maths by any stretch of the imagination, but I reckon for a 10 year or less mortgage you can't go wrong with fixed. More than that, then you enter the "how long is a piece of string?" realm.

Many who have gone the big mortgage amount/term, it seems, would have been better off if they went variable, as the crossover on the current increase has historically occured at around the 2-4 year point after sign on. I think this would make the variable the winner in 12+ year mortgages, and probably 6 to 1 half a dozen to the other for the 10-12 year mortgage range.

Personally, I prefer the devil you know with fixed. No worries on market variations and a known quatity for the budget. Then again, I'm a boring bastard who will never make real money 'cause I'm as about as adventurous as porn star on her day off.:}

At the risk of further thread creep, does anyone know of a rumoured revision of the housing scheme in the not too distant future?

[Numero Crunchero]

Well I did crunch the numbers when the scheme came in;-) My advice then was to go variable as I thought rents were undervalued. Now I am not so sure they are undervalued.

Here is my thinking...usually rents and house prices are highly correlated. So if rents go up, then presumably you will be making a capital gain. If rents stagnate or go down, you are losing money on the capital value as well or breaking even.

So to my way of thinking, fixing the rate removes that correlation and removes one more variable. Additionally it gives you extra money in the first couple of years when it might be a lot more useful.

If the variable rate rises rapidly you will lose on the fixed rate but you will be gaining on the house price. If the variable rate falls then you will be making on the fixed rate but losing on the house value.

So fixing is a rather cautious and risk reducing strategy - if I was buying now I would go fixed. A few years ago I would have gone variable - horses for courses I guess.

clear as mud?