Major banks clamp down on mortgagesBusiness | Stella Zhai 16 Oct 2019
Major banks in Hong Kong, including the Hong Kong and Shanghai Banking Corporation, Hang Seng Bank (0011) and Bank of China (Hong Kong) (2388) are no longer accepting mortgage applications for the rest of the year to avoid overlending, the Sing Tao Daily reported.
Hang Seng Bank said in an internal memo that it will suspend the acceptance of primary and secondary mortgage applications, as well as transfer of loans for the rest of this year, The Standard's sister publication said.
Lenders are processing mortgage applications slowly and indifferently, market observers said.
The banks are said to be advising customers to delay their applications until next year due to long approval times or suggesting that they turn to other banks.
However, the banks are reviewing mortgage applications for next year as normal.
A bank spokesperson said the bank has been receiving and handling all types of mortgage applications and the processing time and results would vary depending on the circumstances of the applicants.
Analysts said this negative attitude may be attributed to a flood of mortgages received by major banks this year.
Wong Wing-yan, Ricacorp Mortgage Agency managing director, suggested that secondary home buyers postpone their applications until next year, due to increasing uncertainties in the local property market.
The fastest transaction period for a secondary unit would be 45 days, she said, and switching to smaller banks might mean a longer wait for buyers.
Centaline Mortgage Broker managing director Ivy Wong Mei-fung said that despite possible overlending, the bank loan-to-deposit ratio had reached 90.1 percent in August.
Standard Chartered Hong Kong was also reported to have cut mortgage rebates to a range of zero to 1 percent, with effect from today, following the recent move by the HSBC and Hang Seng Bank.
There is less chance that large banks will reduce mortgage interest rates, Wong said.