Hong Kong banks have problem. They have too much money. For most of us that would be a nice problem to have. But not if you are a bank. In simple terms, Hong Kong is awash with liquidity (and has been for several years) . As a result, bank deposits have been growing faster than the banks can lend the money out.
HSBC (the largest lender in the Hong Kong market) has initiated a new round in the bid to win market share by offering prime minus 2.75% with the first two months interest free. With HSBC's prime lending rate at 8%, this means an effective interest rate of 5.25% before adjusting for the interest free payments at the beginning of the loan's term.
HSBC is not the cheapest lender in the market. Other banks are offering P-3% or HIBOR + 0.5% with 0.4% cash rebate. These are better deals than HSBC's. Also, the penalty period for early repayment has dropped from the standard three years to two years with some banks.
Most significantly from my perspective as an investor, the terms offered by some banks on residential investment properties are now the same as for owner occupied properties.
With rents rising on the back of strong demand and effective interest rates falling due to competition from the lending banks for market share, it is a good time to be an investor.