HSBC has extended applications for fixed-rate mortgages in Hong Kong, with the annual interest rate adjusted to 2.93%. Eric Tso, Chief Vice President at mReferral Mortgage, said HSBC's extension of fixed-rate mortgage applications is believed to be an early preparation to compete for mortgage business at the end of this year and the beginning of next year.

In light of funding costs and corporate strategy, HSBC has slightly raised the fixed-rate mortgage interest rate ,Tso said. Although the annual rate has raised by 20 bps, it remains 32 bps lower than the cap rates of general new P mortgage plans and H mortgage plans.

Ivy Wong, Managing Director of Centaline Mortgage Broker, responded that the fixed rates of 2.93% for the first three years or first five years under the fixed-rate mortgage plan are still 0.32 ppts lower than the current H mortgage rate of 3.25%, reducing monthly repayments by 4% for a 30-year mortgage.

Although fixed rates were slightly raised in response to higher funding costs, narrowing the advantage over H mortgage rates from 0.52 ppts to 0.32 ppts, changes in interest rate trends have already emerged. After the end of the prime rate cut cycle last year, the market H mortgage rate of 3.25% has remained flat since 4Q25.

Wong said US interest rate expectations have also shifted to a flat trend, with even the possibility of rate hikes due to inflation trends, implying that the H mortgage rate of 3.25% is unlikely to decline within the year. Therefore, the new fixed-rate mortgage offering at a lower fixed rate of 2.93% remains attractive.