Some day this will blow up:
Chase Manhattan Cuts HK Mortgage Rate Further Below Prime
Wednesday, March 1, 2000 01:38 AM
HONG KONG (Dow Jones)--Chase Manhattan Bank's (CMB, news, msgs) Hong Kong operation is offering residential home loans for specific projects as low as two percentage points below prime rate for the first two years, suggesting the city's mortgage price war is showing no signs of abating.
Eric Tong, head of mortgage business, said the bank is offering loans of more than HK$2.5 million at prime (currently 8.75%) minus two percentage points, but only for specific Hong Kong properties.
The bank is also offering some mortgage loans at prime minus 0.25 percentage point for the life of the loan, and a cash bonus worth 3.5% of the original loan amount.
But this isn't the first time the bank has moved below prime. Tong said there is a need to move further below prime "because of market forces" - noting some local and Chinese banks were offering loans at prime minus 1.75% for the life of the loan.
"So we have to stay active in the market," he said. "And we only limit it to the first two years."
The move comes only days after the Hong Kong Monetary Authority reported that the recovery in new mortgage lending slowed in January.
"The mortgage war has continued to intensify and has reached the point in some cases where the margin barely covers funding costs in the initial year of the loan," HKMA deputy chief executive David Carse said. "The HKMA considers that this is an unhealthy development." |
