Hong Kong Banks Go Big on Cash Handouts in Mortgage Battle

(Bloomberg) — Fierce competition for new mortgage customers is driving banks in Hong Kong to offer the highest cash rebates in nearly two decades.

The deals — offered as a percentage of the principal loan amount — doubled from 1.3% last year to as much as 2.6% currently, the highest in more than 17 years, according to Centaline Mortgage Broker data.

Banks such as HSBC Holdings Plc and Bank of China (Hong Kong) are using the incentive as a way to draw in clients as property transactions remain subdued. The city’s real estate market is still reeling from an exodus of residents last year amid its stringent pandemic restrictions. Lenders are also getting squeezed as a cap on lending rates in the city crimps margins.