Bank Mortgage ComparisonBanks need a little help these days. Some may be posting record profits and others paying out record executive bonuses, like the £588 million by the Royal Bank of Scotland, but that just adds to the problem. Granted the big investment banks and the local branch you pay your phone bill at are very different animals, and the highest-ranking officers of RBS, Barclays and others are turning down their fat bonus cheques in service of some good PR. But to the public mind, they’re one and the same. And they collectively causes a financial crisis so severe in 2008 there was talk of a repeat of 1929.

Most of us use a bank for paying bills, running a small business and mortgaging our homes. No property agent in Hong Kong would recommend against shopping around for your mortgage, but figuring out where to start is a headache. To that end, this wholly unscientific and non-representative survey of five of the SAR’s banks may give you an idea of where to start. And no, no one’s name is real.
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The HSBC is the most high profile banking institution in Hong Kong and that makes it the biggest target. That said, HSBC has painted a pretty bright bulls-eye on itself lately. The overseas ATM card boondoggle last year and its US$2 billion fine for money laundering in Mexico in 2012 certainly don’t help its image as a bank for the masses. “Oh, I stopped dealing with them ages ago,” says Emma, a 15-year Hong Kong resident, whose first account was with HSBC. “I don’t know why anyone would, other than for newcomers who recognise the brand. I make a good living and when it came time for a mortgage they made it clear I wasn’t in their league — at least that’s how it felt. So I left.” HSBC definitely feels elite and is the bank of choice for mega-businesses and developers. It consistently has the some of the highest interest rates in the city, and it’s the reason many consumers dump it for its sister, Hang Seng.

Hang Seng certainly has a better image than HSBC, and after a year or so at the latter, Gordon made the move there. Three years ago, he was in the market for a mortgage and, like most of us used to in the old days, went to his own bank first. “HSBC were useless and terms were very rigid. But my own bank, Hang Seng, didn’t offer a good deal either,” he recalls. He started shopping around and found better rates at the Bank of East Asia and Standard Chartered, eventually opting for that. But Hang Seng left a bad taste in his mouth and didn’t appreciate what he considered a bit of a run-around. “Only after I told them what Standard Chartered offered did they back track and say they could offer that too,” he says. “I expected more, better, from my own bank.” The bank is well governed and is one of the SAR’s largest, and currently enjoys a relatively good reputation, and so it’s possible Gordon is the exception to the rule. Neither HSBC nor Hang Seng responded to requests for a comment.

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PR wise, the Bank of East Asia and Standard Chartered fare much better. Emma left HSBC for BEA and her mortgage is currently with them. She’s pleased so far. “I have no issue with them right now. They’re a little heavy-handed with the ‘promotions’ and ‘pre-approved’ credit cards and such, but I think all the banks do that. And no, I don’t feel particularly vulnerable.” She’s referring to the bank’s 2008 liquidity kerfuffle, which saw BEA making several statements affirming its financial stability, largely stemming from unauthorised trades that resulted in significant losses. Gordon nearly went with BEA as well, noting, “They were very good and efficient and had better rates than HSBC and Hang Seng, and they were upfront about penalties and deadlines.” How BEA’s misstep has affected its image is a mystery, but it still offers some of the best rates in the city as well as some of the most diverse plans. BEA did not respond to requests for a comment.

The UK-based Standard Chartered frequently comes out ahead of the pack. Low scandal, high transparency and an international vibe have made it an increasingly popular choice. It prints money, how bad could it be? “I chose them because they offered the best deal and they didn’t dick around,” states Gordon. “They offered a very good deal on fire insurance … and some sort of cash rebate of about $25,000 that they deposited to my account a week after the mortgage draw down. The woman who handled my mortgage was lovely and was in constant communication with me on the process and answered every email very promptly.” Ah-Lung, whose mortgage dates back six years, agrees. “I went and saw a few banks to get their offers. In the end I went through a referral company that obviously got a fee from a bank if they refer someone,” he remembers. Of all the offers they came back with, Standard Chartered’s was the strongest. “There was no consideration for what bank it was, but I might have given some if the bank was a very small one,” Ah-Lung admits. Standard Chartered did not respond to requests for a comment.

But there are scores of those smaller bank options when it comes to mortgages in Hong Kong, all vying for business. Wing Hang is one of the most low-key of the lot, but is has some of the most competitive rates. Wilma opened an account with a Wing Hang branch when she started saving for her down payment in 2007 because it was around the corner from work. She had to deposit cash and destroyed the ATM card. “I wanted that money to be inaccessible,” she says. “When I started looking for mortgages, I didn’t even consider it. Then I saw their rates, and it felt like a small town bank; they look me in the eye when they talk to me. So I stayed.” Like SC, Wing Hang is largely controversy-free and in banking terms, no news is good news. Nonetheless — and you know it’s coming — Wing Hang did not respond to requests for a comment.