Singapore - The mainland's biggest developers are borrowing record amounts in Hong Kong, taking advantage of lower interest rates to circumvent a lending crackdown at home.

While banks demand at least 5.2 percent in annual interest for a three-to-five year loan on the mainland, the cost of credit in Hong Kong dollars has fallen to the lowest since November 2004, according to data compiled by Bloomberg. China Overseas Land & Investment Ltd agreed to an HK$8 billion ($1.03 billion) loan in February that pays 1.45 percent at current market levels, the data show.

"For property developers to keep growing in what is an extremely fragmented and competitive market they have to go offshore" for funds, said Brayan Lai, a credit analyst at Credit Agricole CIB in Hong Kong. "It's one way to circumvent tight onshore credit."