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Hong Kong banks trim prime rates by a quarter point, meeting Fed’s aggressive cut halfway
For a typical HK$5 million, 30-year loan priced at prime minus 1.75 per cent, a quarter-point cut in prime rates will save mortgage borrowers HK$720 per month
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Five of Hong Kong’s major commercial banks cut their prime rates for the first time in almost five years, after the local monetary authority followed the US Federal Reserve in kicking off a rate-cut cycle.
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Bank of China (Hong Kong), HSBC and its Hang Seng Bank unit will trim their prime lending rates by a quarter percentage point to 5.625 per cent, and cut their savings rate by the same margin to 0.625 per cent per annum for deposits that exceed HK$5,000 (US$640), the banks said in separate statements on Thursday.
Standard Chartered and Bank of East Asia will pare the loans rate for their best customers by a quarter point to 5.875 per cent, and will reduce their deposit rate to 0.625 per cent, back to the level of November 2022.
The cuts translate to savings for borrowers who tie their loans to prime rates. For a typical HK$5 million loan of 30 years priced at prime minus 1.75 per cent, the reduction lowers the mortgage rate to 3.875 per cent and shaves the monthly payment by HK$720 to HK$23,512, according to mReferral, a local mortgage broker.
Earlier in the day, Hong Kong’s de facto central bank cut its base interest rate for the first time in four years in lockstep with the US Federal Reserve, which slashed its target rate by half a percentage point.
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