With interest rates at historically low levels, a 90% fixed rate mortgage scheme has been launched offering homebuyers a low mortgage rate for up to three years.

HK Mortgage Corporation Executive Director Norman Chan said today the body will jointly run the scheme with the Bank of East Asia.

Under the agreement, the corporation has made a forward commitment to purchase up to $1 billion in fixed-rate mortgage loans from the bank. In return, the bank will be paid a servicing fee for managing the portfolio for the corporation.

Mortgages relating to residential properties in both the primary and secondary markets with mortgage amounts up to $4 million will be eligible under the 90% fixed rate mortgage scheme.

To attract homebuyers, borrowers who submit loan applications by March 20 will have the choice to fix the mortgage rate from one to three years at favourable mortgage rates ranging from 1.68% to 3.18%.

After the initial fixed rate period, borrowers can opt to revert back to a floating mortgage rate at Prime 2.6%.

Borrowers can also enjoy a preferential mortgage insurance programme premium, a cash bonus, fire insurance, a credit card fee waiver and other preferential offers. For details, click here.

"To the originating bank, it provides an extra source of steady fee income and an effective avenue for marketing banking products to mortgage borrowers," Mr Chan said.

"To the corporation, it will help us diversify our mortgage portfolio to include a good mix of floating and fixed rate mortgages."

For further information, contact the bank at 2868 5151.