Market sources said that HSBC will lower the capped interest rate for new or refinancing H mortgages on second-hand properties from "P-2%" to "P-2.25%" with immediate effect, which means the effective mortgage rate will be reduced from 3.625% to 3.375%, which is on par with the capped interest rate for H mortgages on first-hand properties and also on par with the mortgage rates of small and medium-sized banks.

Some market participants believe that other large banks such as Bank of China Hong Kong and Hang Seng will follow suit to remain competitive and put pressure on the small and medium-sized banks.

Mr Chong Kam-fai, Chief Executive Officer of StarVale Mortgage Referral, said that while large banks have a 3.625% H-mortgage cap rate for second-hand properties, many small and medium-sized banks have adopted a more aggressive mortgage strategy and can achieve H-mortgage cap rates as low as 3.375%.

He estimated that with the rebound of the property market, the price and volume of the secondary market has increased, and the large banks want to increase their competitiveness and adjust their pricing strategies.

Mr Chuang also said that due to the macroeconomic uncertainty and the recent pressure on the US banking sector, the US Federal Reserve is expected to be conservative and stop tightening measures or reduce the rate hike in order to stabilise market sentiment and ease the pressure to raise interest rates in Hong Kong.