Saudi Press

Saudi Arabia and the world
Sunday, Jun 01, 2025

As Bank of East Asia joins Hong Kong lenders in providing mortgages for Greater Bay Area homes, here is what you need to know about the loans

As Bank of East Asia joins Hong Kong lenders in providing mortgages for Greater Bay Area homes, here is what you need to know about the loans

Bank of East Asia is among six Hong Kong lenders offering a cross-border mortgage loan service. Chinese capital controls, exchange rate risks among factors that Hong Kong buyers must consider

Hong Kong banks expect more Hongkongers to seek out property in the Greater Bay Area development zone, and at least six of these now offer mortgages for such purchases.

On Tuesday, Bank of East Asia (BEA) became the latest lender to offer a cross-border mortgage loan service, following in the footsteps of Chong Hing Bank, which was the first to offer such loans in June last year; HSBC; ICBC Asia, the Hong Kong unit of China’s largest bank; China Construction Bank (Asia); and Nanyang Commercial Bank.

Hong Kong residents accounted for less than 2 per cent of the residential transactions in the area in 2018, the total of which was an estimated 700 billion yuan (US$99 billion), according to CGS-CIMB Securities.

In February 2019, however, Beijing announced a blueprint for the development of the area, including measures that will create jobs and generate capital flows. This plan is expected to encourage more Hongkongers to work and live in the Greater Bay Area, where homes are cheaper than those in Hong Kong.

“Increased connectivity within the Greater Bay Area has also sparked a growing demand from individual customers for residential property in the region. With this in mind, Bank of East Asia is launching a cross-border mortgage service to help customers across the region buy a home in different locations for work, leisure or retirement,” said Adrian Li, the bank’s co-chief executive.

Previously, Hong Kong buyers could only apply to mainland Chinese banks for mortgages. They can now apply at the branches of the six banks in the city, but they might still need to go to mainland branches to complete some procedures. The can repay their mortgages in Hong Kong dollars.

The bay plan refers to the Chinese government’s scheme linking the cities of Hong Kong, Macau, Guangzhou, Shenzhen, Zhuhai, Foshan, Zhongshan, Dongguan, Huizhou, Jiangmen and Zhaoqing into an integrated economic and business hub. Together the area has an economic output of US$1.65 trillion, making it the 11th largest economic cluster worldwide, ahead of Russia and behind Canada if it were counted as a single entity.

Here are some details of the mortgages that Hong Kong buyers of property in the Greater Bay Area can apply for.


How much can one borrow?

This ranges from a minimum of HK$500,000 (US$64,514) to HK$50 million. Nanyang Commercial Bank, for instance, can lend up to a 30-year mortgage capped at HK$50 million, or 70 per cent of the value of a property, whichever is lower. China Construction Bank (Asia) offers 30-year mortgages from HK$500,000 to HK$10 million, while Chong Hing Bank offers 10-year mortgages up to HK$2 million, or 50 per cent of the value of a property.


Will banks help remit money to mainland developers and for second-hand property?

In most cases, Hong Kong banks will only remit the mortgage amount to developers or sellers, with buyers needing to pay initial down payments themselves.

This is the most difficult part because of capital control requirements in China. Currently, one can only remit up to 80,000 yuan a day from Hong Kong to the mainland. Buyers also cannot remit 80,000 yuan for a number of days to accumulate a large sum on the mainland. As a workaround, Hong Kong buyers usually rely on relatives or friends in mainland China to make initial payments for them, according to Midland Realty. Some might also use income generated on the mainland to settle a deal.

Certain developers, however, might have special arrangements with Hong Kong banks to remit the entire sum of a transaction to complete a deal.


What should borrowers do to make an application?

Borrowers need to submit their application forms to the Hong Kong branches of banks, alongside documents to prove their identity, residential address in Hong Kong and income, as well as the sales agreement for the property concerned.


Do the banks cover all nine mainland cities part of the Greater Bay Area?

No. HSBC accepts mortgage applications for six of these cities – Guangzhou, Shenzhen, Zhuhai, Dongguan, Foshan and Zhongshan. BEA, meanwhile, covers four and ICBC (Asia), three.


Will borrowers pay the Hong Kong mortgage rate or the mainland Chinese mortgage rate?

Since the loans are being offered in Hong Kong dollars, borrowers will pay the Hong Kong dollar mortgage interest rate, which ranges from 2.75 per cent to more than 3.5 per cent. These rates are cheaper than mainland rates, which range from 5 per cent to 6 per cent.


What risks should borrowers pay attention to?

Unlike in Hong Kong, where homebuyers can go to any bank for a mortgage, mainland developers restrict which banks can provide loans for their projects. In addition, mainland property is bought in yuan, while the mortgage will be in Hong Kong dollars, so there will be exchange rate risks.


If a borrower fails to repay their mortgage, will the bank take possession and sell the property to recover its loan?

Yes, just like mortgages in Hong Kong, the property will be used as collateral. If the borrower is in default, the bank has the right to take possession and to sell the property to recover its money.




Newsletter

Related Articles

Saudi Press
0:00
0:00
Close
OPEC+ Agrees to Increase Oil Output for Third Consecutive Month
Turkey Detains Istanbul Officials Amid Anti-Corruption Crackdown
Meta and Anduril Collaborate on AI-Driven Military Augmented Reality Systems
EU Central Bank Pushes to Replace US Dollar with Euro as World’s Main Currency
European and Arab Ministers Convene in Madrid to Address Gaza Conflict
U.S. Health Secretary Ends Select COVID-19 Vaccine Recommendations
Trump Warns Putin Is 'Playing with Fire' Amid Escalating Ukraine Conflict
India and Pakistan Engage Trump-Linked Lobbyists to Influence U.S. Policy
U.S. Halts New Student Visa Interviews Amid Enhanced Security Measures
Trump Administration Cancels $100 Million in Federal Contracts with Harvard
SpaceX Starship Test Flight Ends in Failure, Mars Mission Timeline Uncertain
King Charles Affirms Canadian Sovereignty Amid U.S. Statehood Pressure
Iranian Revolutionary Guard Founder Warns Against Trusting Regime in Nuclear Talks
UAE Offers Free ChatGPT Plus Subscriptions to Citizens
Lebanon Initiates Plan to Disarm Palestinian Factions
Iran and U.S. Make Limited Progress in Nuclear Talks
The Daily Debate: The Fall of the Dollar — Strategic Reset or Economic Self-Destruction?
Trump Administration's Tariff Policies and Dollar Strategy Spark Global Economic Debate
OpenAI Acquires Jony Ive’s Startup for $6.5 Billion to Build a Revolutionary “Third Core Device”
Turkey Weighs Citizens in Public as Erdoğan Launches National Slimming Campaign
Saudi-Spanish Business Forum Commences in Riyadh
Saudi Arabia and Spain Sign MoU to Boost SME Sectors
UK Suspends Trade Talks with Israel Amid Gaza Offensive
Iran and U.S. Set for Fifth Round of Nuclear Talks Amid Rising Tensions
Russia Expands Military Presence Near Finland Amid Rising Tensions
Indian Scholar Arrested in Crackdown Over Pakistan Conflict Commentary
Israel Eases Gaza Blockade Amid Internal Dispute Over Military Strategy
President Biden’s announcement of advanced prostate cancer sparked public sympathy—but behind closed doors, Democrats are in panic
A Chinese company made solar tiles that look way nicer than regular panels!
Indian jet shootdown: the all-robot legion behind China’s PL-15E missiles
The Chinese Dragon: The True Winner in the India-Pakistan Clash
Australia's Venomous Creatures Contribute to Life-Saving Antivenom Programme
The Spanish Were Right: Long Working Hours Harm Brain Function
Did Former FBI Director Call for Violence Against Trump? Instagram Post Sparks Uproar
US and UAE Partner to Develop Massive AI Data Center Complex
Apple's $95 Million Siri Settlement: Eligible Users Have Until July 2 to File Claims
US and UAE Reach Preliminary Agreement on Nvidia AI Chip Imports
President Trump and Elon Musk Welcomed by Emir of Qatar Sheikh Tamim with Cybertruck Convoy
Strong Warning Issued: Do Not Use General Chatbots for Medical, Legal, or Educational Guidance
Saudi Arabia Emerges as Global Tech Magnet with U.S. Backing and Trump’s Visit
This was President's departure from Saudi Arabia. The Crown Prince personally escorted him back to the airport.
NVIDIA and Saudi Arabia Launch Strategic Partnership to Establish AI Centers
Trump Meets Syrian President Ahmad al-Shara in Historic Encounter
Trump takes a blow torch to the neocons and interventionists while speaking to the Saudis
US and Saudi Arabia Sign Landmark Agreements Across Multiple Sectors
Why Saudi Arabia Rolled Out a Purple Carpet for Donald Trump Instead of Red
Elon Musk Joins Trump Meeting in Saudi Arabia
Trump says it would be 'stupid' not to accept gift of Qatari plane
Quantum Computing Threatens Bitcoin Security
Michael Jordan to Serve as Analyst for NBA Games
×