June 29 (Bloomberg) -- Hong Kong high school teacher Chris Poonâs dream of buying his first apartment was dashed in December when banks refused to fund more than 50 percent of the HK$3.5 million ($450,000) purchase. Poon, 33, tried again in May and got a loan covering 70 percent of the price for the 700-square-foot (65-square-meter) apartment in Hong Kongâs Sai Wan Ho district from BOC Hong Kong (Holdings) Ltd. The mortgage rate was 2.25 percent, down from the 3.5 percent that Poon was discussing with lenders last year. Mortgage rates in the city are the lowest in at least 19 years, as far back as records are available, to offset slower demand for other types of credit during Hong Kongâs worst recession in a decade. Among developed economies, only Japan offers similarly cheap loans, as its central bank has kept interest rates below 1 percent for the past 14 years, said Leland Sun, founder of Pan Asian Mortgage Co. âHong Kong banks are killing themselves with the low rates,â said Sun, whose Hong Kong-based firm advises homebuyers. Average net interest margins for the cityâs banks -- the difference between what they charge for loans and the cost to fund them -- will narrow by as much as half a percentage point this year from 2008, said Lee Yuk-kei, an analyst at Core-Pacific Yamaichi International Ltd. in Hong Kong. http://www.bloomberg.com/apps/news?pid=20601087&sid=aBCwwJZQZqaI
...his first apartment was dashed in December when banks refused to fund more than 50 percent of the HK$3.5 million ($450,000) purchase. Poon, 33, tried again in May and got a loan covering 70 percent of the price... The mortgage rate was 2.25 percent, down from the 3.5 percent that Poon was discussing with lenders last year. why can't we have a deal like that?