Hang Seng Bank has re-introduced its fixed-rate mortgage plan for the first time since 2018, which offers a fixed rate of 2.73 percent for the first three years, following the relaunch pace of the Hongkong and Shanghai Banking Corporation last year.
The rate represented nearly 0.5 percentage points lower than the H-plan and P-plan rates at 3.25 percent in most banks. H-plan and P-plan refer to interest rate caculated by the Hong Kong interbank offered rates and the prime rate, respectively.
Compared to HSBC's current fixed-rate mortgage offering, Hang Seng Bank's newly launched plan offer same interest rates and privileges, but it doesn't have the five-year term option and features a longer application deadline of the end of May than HSBC's extended date of the end of April.
Hang Seng Bank's new mortgage plan provides immediate interest savings, said Eric Tso Tak-ming, chief vice president of mReferral Mortgage Brokerage Services.
He exemplified that a loan amount of HK$5 million over a 30-year tenure can reduce the monthly repayment by HK$1,401, or 6.4 percent, to HK$20,359 under Hang Seng's plan, compared to that of HK$21,760 based on the prevailing H-plan and P-plan rates of 3.25 percent.
Tso noted that fixed-rate mortgages not only offer interest savings but also lock in rates for a specified period, shielding borrowers from future interest rate volatility, which appeals to individuals with non-fixed income or long-term investors like those buying for rental.
