Bank of China raises fixed rates for Hong Kong mortgages

The city's biggest mortgage lender, Bank of China (Hong Kong), has increased the rates for fixed-rate mortgages for those seeking to upgrade their homes.

The lender has from today raised its rate under the scheme to 2.65 per cent per annum from 2.4 per cent for borrowers opting to lock in their interest rate for the first five years of their loan.

Borrowers who choose to have a fixed rate for the first seven years will be charged 3.15 per cent, up from 3 per cent.

"Our costs have increased, so we are raising interest rates on fixed-rate schemes," said Chow Chak-chee, the bank's head of product management.

For customers who elect to fix their mortgages' interest rate for the first three years, the interest rate remains unchanged at 2.4 per cent. The rise comes after Standard Chartered Bank and Dah Sing Bank scrapped their fixed-rate mortgage offerings.

Dah Sing Bank said it stopped offering such mortgages because there was little take-up.