Cheung Hing Mortgage: Hong Kong's 2025 refinancing registration drops by 14% year-on-year, declining for the third consecutive year.

Wang Meifeng, Managing Director of Zhongyuan Mortgage, pointed out that according to data from the research department of Zhongyuan, a total of 6,941 bank mortgage-to-loan conversions were recorded in 2025, a decrease of 14.4% compared to 2024. This marks the third consecutive year of decline, reaching the lowest level since records began in 2010. The continued sluggishness in the mortgage-to-loan market has its reasons. This is because banks raised the interest rates for new mortgages and mortgage conversions in 2023, causing homeowners who took out mortgages earlier to still have lower interest rates than the current market rates. Furthermore, although property prices have stabilized and risen since last year, property prices are still undervalued by more than 20% from their peak, making the incentive for mortgage conversions weak. In terms of market share, BOC HONG KONG (02388) ranked first with a market share of 25% in 2025, maintaining the top spot in mortgage conversions for four consecutive years. Looking ahead to the mortgage conversion market in 2026, Wang Meifeng expects a rebound from the low levels, ending the downward trend. She analyzes that with property valuations stabilizing and the gradual decrease in funding costs during the rate-cutting cycle, the mortgage conversion market is set for a turnaround. Since the second half of 2025, property valuations have gradually increased, and with mortgage policies being relaxed, it has become easier for some applicants, such as those looking to convert developer mortgages, to be approved for mortgage conversions, leading to an increase in recent applications. As bank funding costs decrease during the rate-cutting cycle, banks are showing more enthusiasm for mortgage conversion services, and cash rebates for mortgage conversions have been increased. For homeowners who have had the same interest rates for the past two years, the end of the penalty period may be the right time to convert their mortgages. Wang Meifeng pointed out that with the combination of rising property valuations, increased bank incentives, and lower interest rates, the incentives for mortgage conversions this year have increased, which is expected to drive an rebound in the number of mortgage conversions in 2026.