Data from the Central Mortgage research department reveals that banks recorded 6,941 refinancing registrations for the full year of 2025, representing a 14.4% decrease compared to 2024. This marks the third consecutive year of decline, once again hitting the lowest level since records began in 2010. The persistent weakness in the refinancing market is attributed to specific factors, primarily banks having raised interest rates for new and refinanced mortgage plans back in 2023. This has resulted in the existing mortgage interest rates for homeowners who secured their loans earlier remaining lower than current market mortgage rates. Furthermore, despite property prices stabilizing and rebounding since last year, property valuations are still considered low, remaining more than 20% below their peak levels, which continues to make the incentive for refinancing weak.
In terms of market share, BOC HONG KONG (02388) ranked first for the full year of 2025 with a 25% market share, securing the top position in refinancing market share for four consecutive years. Looking ahead to the 2026 refinancing market, it is anticipated that the market is expected to recover from its low point and end the downward trend. Analysis indicates that benefiting from stabilizing property valuations and gradually declining funding costs amid the interest rate reduction cycle, the refinancing market is witnessing a turning point. Since the second half of 2025, valuations for many properties have gradually increased. Coupled with the full relaxation of mortgage measures, this has made it easier for applications with specific refinancing needs, such as switching from developer mortgages, to gain approval compared to before, driving a recovery in refinancing application volumes from their lows in recent months. With banks' funding costs decreasing during the rate-cutting cycle, their proactiveness in the refinancing business has increased, leading to higher cash rebates for refinancing. For homeowners whose mortgage plan rates from two years ago are now similar to current rates, the expiration of the penalty period may present an opportune time for refinancing.
It is pointed out that with the combined effect of three major factors—rising property valuations, increased bank incentives, and declining mortgage rates—the incentive for refinancing has grown this year. This is expected to drive a rebound in refinancing registration volumes from their low levels in 2026.
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