Posted by
Soho Chris
14 yrs ago
Hi all, I'm after any thoughts on whether this represents a good mortgage offer or if there's something more I could bargain for - it's with DBS for a 95% mortgage. It seems pretty fair to me, given the state of the lending market, so I'm unsure I can get a significantly better deal. Many thanks for any advice you can impart. Cheers.
Interest rate: 1 month Hibor + 0.65% and capped at DBS Prime minus 2.75%
Cash rebate: 0.7% on the mortgage loan amount
Full prepayment penalty: 2% for 1st year, 1% for 2nd year (on outstanding principal balance)
Partial prepayment penalty: 0.7% on prepaid amount for the1st 24 months
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Did you see the front of the HK Standard today?
http://www.thestandard.com.hk/news_detail.asp?pp_cat=30&art_id=95256&sid=27267358&con_type=1
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Ha, I didn't, interesting reading. Many thanks for your feedback. Best wishes.
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I got a slightly better 70% mortgage offer, done through a mortgage referral company:
1 month Hibor + 0.65%, Cap: P-2.8%, Same cash rebate: 0.7%
Penalty : Full payment: 1st year: 1%, 2nd-3rd year: 0.7%
Partial payment: 1st-3rd year: 0.7%
1 Mth Hibor can be quite volatile, in the past 10 years:
Low: 0.04018, High: 5.70357, Average: 2.14875
Better to have a Cap as low as possible.
As for HKMA’s reference bottom price, it is not effective yet (just checked with my bank). If you complete the mortgage application soon, you can still have 1Mth Hibor +0.65%.
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C
14 yrs ago
Hi CLV, which bank was that with?
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Same as making any decision, taking a HIBOR plan means you have considered all the relevant risks.
In HIBOR plan, I pay 1.72% less interest compared to the P plan. No reason why don’t take it now. Prime rate will follow US interest rate hike, probably in the second half of this year. I’ll see how does HIBOR go, and decide what to do next. I have the flexibility of switching to the P plan free of charge within the first year.
C, I don’t want to advertise any banks here. Will send you a message. But suggest you talk to a mortgage referral company first, they’ll recommend a few banks’ offer based on your need, free of charge.
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PizzaAce has been bashing HIBOR for nearly a year now. I am so far glad I chose it and glad I didn't switch yet... the only thing I'd like to do is get a better cap and I'll be satisfied, which is what I'll work on doing on my one-year anniversary (whereby my penalty drops significantly)
If you can try to get the best partial pay terms available. Then if you do want to make partial payments you can do so after a year.
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Please could you let me know the details of the mortgage referral company? I would be interested to see what are the options out there.
Thanks
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C'est La Vie could you please send me details of which bank is offering the rates you mentioned.
thank you
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mrjollyhk, supermfd2, message sent.
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Hi C'est la vie,
I don't really know too much about finance... but having read these posts, do you think I should check with a mortgage referral company about re-negotiating my current loan.
I took a mortgage in Dec 2003, so I guess I've passed all the penalty periods for opting out of the mortgage now. Seems I could see whether anyone else could offer a better rate... am I right? Then it's just a matter of taking out a new mortgage and paying off the old one?
Thanks. (if so, could you pm details of a mortgage referral company)...
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C
14 yrs ago
Hi Slammy,
You should be past the penalty period (7 yrs!), but better to check your agreement to be 100% sure. I would recommend shopping around, either with the referral co. or just on your own drop in the bank and ask them if they can beat your current offer. If they want your business, then you can discuss further. The new bank will take care of taking over the mortgage from your existing bank, i.e. there is nothing for you to do to "pay off the old one".
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Slammy,
Theoretically you need to pay off the outstanding loan amount and refinance with a new mortgage. This is done through a lawyer, cost about HKD 5,000. The whole procedure takes about 2weeks to 1 month.
Will explain more in PM.
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Chris Soho,
Are you a permanent resident or HK citizen? Reason I am asking is that you have a 95% loan. All the banks and mortgage referral companies I've asked have said they will only give me 70% as a non permanent ID holder, and if I want upto 90% I have to pay a regulatory mortgage insurance premium up to nearly 4% of the entire loan quantum.
Does anyone know about this and how I can get a 90-95% loan without paying the insurance premium?
Thanks and regards
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maz27
14 yrs ago
Dizzyhytes - I'd like to know the answer to your question as well.
A Cathay Pilot told me that some banks dont go through the mortgage corporation for approval over 70% though he didnt know which ones exactly/
Anyone?
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Bank of China (see "Smart Easy" Top Up Mortgage")
http://www.bochk.com/web/common/multi_section.xml?section=personal&level_2=mortgage&fldr_id=1527
DBS (see "1+2" 95% Mortgage Plan)
http://www.dbs.com.hk/en/consumer/loans/mortgage/mortinsur/
In each case you don't pay a MIP but an Arrangement Fee. Works out slightly more expensive but is a way out for people who cannot pass HKMC criteria. The MIP or Arrangement Fee can be integrated into the loan amount so it need not be paid upfront.
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Pizzace. I agree. I'm a straight Prime minus 3 man myself. Can't be doing with these kinky Hibor-linked deals. I prefer the cheaper rate over 25 years.
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I got Hibor +0.5 capped at prime -2.85%. This was a few back though
The bank which does the +70% without Mortgage corp is SCB but they will still charge you that ripoff insurance premium
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Hi all,
Currently, is it possible to get 70%+ mortgages? How about for flats with values exceeding HKD 20 million? Is it possible to get mortgages exceeding 60% of the flat value, for example 70%?
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190k
14 yrs ago
I just got P-2.9 from Hang Seng bank
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To the HIBOR doubters, excuse my ignorance, but doesn't a cap of P-2.8% give pretty good protection?
I'm on P-2.88% right now. Past all penalty periods. I apparently can't refi to HIBOR loan with my existing bank, but based on a recent conversation w/ them I gather my bank is prepared to put me on P-3% (at least) and offer cash rebate of 1%. Because I am lazy, I will probably do this rather than look for a new bank with whom I could do HIBOR. That said, am I am missing something about the downsides to a HIBOR-linked mortgage (assuming there is an acceptable cap tied to Prime).
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Janes addiction. I'm a Hibor doubter. It's just a trick to get you into a higher-paying mortgage in the long run. The bank gives you money up-front but you are locked into a worse deal over the life of the mortgage. The bank funds itself relative to Hibor - so it can still make money with the Hibor option. When Hibor goes up, you lose. You are assuming when the penalty period is up, you will still be able to refinance at Prime minus 3. When I first bought a property in 1996, the mortgage rates was Prime + 1.75%. Go for the Prime minus 3 and stick with it unless you intend to sell your property for a fast buck.
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Thanks. Perhaps I misunderstand the cap, as to me it sounds like a cap at P-2.8% is not bad. So you get a better rate now due to low HIBOR, and have the downside protection of P-2.8% if HIBOR moves against you.
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Yes but you get Prime minus 3 for up to 30 years with the HSBC Prime option.
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Hi,
Would like to ask some questions, as I'm thinking of refinancing my Bank of China loan.
People are talking about p-3... so I guess you got a fixed rate then? Seems like a very good deal.
Right now, I'm on P-2.775 and Bank of China can offer me P-2.95, fixed penalty of one year, and no charges for the new rate.
If I want to switch to HIBOR, which frankly doesn't sound too bad if you have a decent cap... I will pay $1000 to switch to the different plan, he said 0.077 percent but that doesn't make sense to me? Two year penalty, and a cap at P-2.5 (which isn't good)...
If I switch to another company, I may be paying $5000 for the lawyers fees to change... do you think I should though? To get a better deal?
Or is it possible to get P-3 as a fixed mortgage rate these days?
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I just called a Mortgage broker and they said they can find this deal for me:
1 month HIBOR +.65%, cap at p-2.75, two years penalty (2% first year, 1% second year).
Probably pay up to $3000 to change. Should I do it?
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Which bank Slammy? Don't forget that some banks prime rates are .25 points higher than HSBC/HS/BOC.
Also, you may still have other penalties (full repayment) with BOC depending on how long you've had the loan out.
I have been playing around with a spreadsheet that tries to illustrate a "what if" picture for a HIBOR loan, with different scenarios... the idea being to try to see whether a HIBOR loan w/ a decent cap works better than a P-x loan at different levels. Unfortunately it's still in it's infancy but will share any useful data w/ the group as it materializes.
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Regarding the HIBOR loan, the mortgage broker didn't reveal which bank, as I haven't signed a referral form with him yet.
Should be no penalties with BOC because I've had the loan since Jan 2004.
We did some rough calculations, based on P -2.95, and the HIBOR plan. With HIBOR as it is, I would pay around $1600 less each month. So in a few months, I would already save the money that I paid on transferring my loan to another bank.
Plus penalty period is two years - can't be too much damage done to HIBOR with a cap in two years, right?
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I am still confused about how the hibor deal works & why some people say the hibor deal is no good at all. If you sign in at a hibor deal that is capped at - 2.8 don't you pay either the capped interest rate or the hibor whichever is lower. Looking at the figures quoted above for 10 year hibor with top at 5.7037 the loan calculation would then be 5.7037 -2.8 = 2.9%. that is still comparable with prime - 3 if prime were at say 8.25% like back in march 2006 which gives a rate of 5.25%. have i got the calculations wrong or am I missing something
how does that differ significantly from prime - 3. Isn't the cap the maximum amount that you can pay so if hibor is higherI am not a finance expert at all but i thought that Prime & Hibor are fairly closely related.
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