[pauly]

I have a question for all the financially literate wizzes on this site.
I am currently shopping for a mortgage and have narrowed it down to HSBC - who offer 5% interest
and standard chartered - who offer a deposit system which reduces your interest payments by the amount you have in your savings account.
My question is this, as my savings are not high at the moment due to purchasing a property- would it be advisable/possible to go with HSBC for say 3 years at the 5 % interest then transfer my mortgage to the standard charteres mortgage one once i have built up enough savings.
just an idea i had
id also appreciate any advice on mortgages in general .
thank you all for your time
cheers

[Football16]

As I don't live in HK and have no knowledge of the mortgage situation there I probably shouldn't be commenting - but I will as this may apply.

One of the other questions you might ask is whether anyone knows if there is a good mortgage broker out there (if they exist in HK as they do in British Columbia).

If they exist it works this way . The mortgage broker gets what you want in terms of specs, money, etc and then he./she shops around and recommends the best mortgages for your needs.

You don't pay the broker, the mortgagor pays him and you will know if it is a good deal as you can shop and compare yourself if you choose. You will not pay more because you use a broker. Most Canadian financial institutions give them the best rates they can as they know they don't care if they use this bank or not. You will not pay more - it is about paying less.

These people do the leg work for you and negotiate a best price for you. You can also do your own checking with a bank yourself as a way to compare and then make a decision. I asked the broker about an unique new product offered by an insurance company's financial arm and he pointed out the problem with the product that I had not seen. Of course there are some brokers who just focus on getting you the best rates and the products are irrelevant which could be problematic if you choose to pay out early.

In our case, the guy got our financial info and needs and came back with a best recommendation and asked what branch of the bank we wanted to go and sign up at. I never met the mortgage broker as it was all done via phone and fax. Of course I met the bank when I signed up.

My bank, the Royal Bank of Canada, then called me to see what I had done and I told them what we did in going to a competitor via our mortgage broker. The RBC lady then reiterated their policy of not dealing with mortgage brokers but asked what rate we got at the Bank of Nova Scotia to which she replied - oh, we couldn't have matched that rate. It was a good deal.

Hope this helps. Get a good broker though with good references and only deal with mainstream mortgage companies.

[pauly]

cheers Football,good advice
i went throgh a broker, but they still seem to be unsure which one is the best deal between HSBC and standard chartered as they are very different mortgages.
im getting a little worried about the interest rate now also- it just keeps on going up

[nivantj]

>> anyone knows if there is a good mortgage broker out there

Almost non-existent in HK partly due to simple and easy mortgage proceedings and partly due to reason that there werent much variations in mortgage offerings in the past... Shopping for mortgage in HK has been as easy as buying cloths, i guess.. Just walk into couple of banks next door and ask for whats their P +/- x.xx.. Though many property agents do fit into this role and, having good connections in some bank, help to get better offer..

Pauly,
Did you check out Stand Chart's latest offering at HIBOR? Its more volatile than fixed rate but not bad if suits individual need..
Also check out Hang seng has also come up with similar shceme though slightly better than Stand Chart in terms of flexibility..

[fly]

HK Mortgage Corporation (http://www.hkmc.com.hk/eng/index.html) are the only mortgage brokers in HK, however the situation isn't exactly the same in HK as it may be in BC. Actually, HKMC get paid by the banks for their referral fee, so while the end customer (you) are not paying for their service, you do lose bargaining power with the bank for a greater rebate or terms or whatever, rather than if you approached them yourself.

[fly]

Pauly, I was in your shoes earlier, and decided against the S/C plan for the same reasons. Actually quite a few banks offer similar plans, but they all depend on your leaving a large portion of cash in your savings acct. I reasoned that if I could use the same amount of cash to get a better return outside, and presumably if I put the earnings into earlier payments back into my mortgage, its effectively accomplishing the same thing. So its great if you've got wads of cash that you don't expect to invest elsewhere, otherwise a low monthly payment may be more preferable to you.

[discobay]

Something worth considering is the cost associated with switching mortgages. Other than the solicitors fees the lender may have a higher than normal administration charge if the loan is paid back within the first three years.

[nation]

Pauly - Hard to say which is best without further details on the terms of each mortgage. Your best bet is to run some numbers over a hypothetical 10/20 year term. Surprised your mortgage broker can't do this for you. You will have to make some assumptions of your savings over the period.

As Disco said you should also be aware of any early payout penalties with the HSBC mortgage and also be aware the Standard Chartered deal may no longer be available in a few years down the track when/if you do decide to switch.

[pauly]

wow you guys are fantastic! thanks for the response
nivantj - just looked into th HIBRO sounds very tempting they offer about 4.1% for the first 3 years , then HIBRO + 1 there after
i am now try ing to figure out what the potential fluctuations will be in the market over the next 20 years - impossible i know
apparently when lots of people save HIBRO is low - which is good
but when lots of people borrow to invest etc HIBRO is higher - not so good for this mortgage
whenever i join a checkout que in the supermarket it always manages to take the longest time - its uncanny.
My worry now is joing the wrong que, mortgage wise.
my loan amount will be approx 1 million
and i will save approx 15000/month
any further pearls guys? before i take the plunge
cheers

[fly]

btw, Citibank also has a savings linked mortgage product similar to S/C and Hang Seng.

As a general rule, I've found smaller banks more aggressive in terms of their rates and rebates... hopefully as the mortgage market contracts, more special offers will come up.

The HIBOR-linked mortgage is very interesting, and sounds very attractive to me personally.

Good luck whatever you decide!