Owning a home in the world’s most expensive property market just got tougher as banks raise mortgage rates
Home loan rates offered by HSBC, Bank of China (HK) and Hang Seng Bank to rise by 10 basis points in line with Citibank’s increase on new borrowers, while all existing homeowners are expected to pay more by the end of August, in what will be the first prime rate increase for 12 years
New borrowers in Hong Kong will have to cough up higher mortgage rates as more than a dozen top banks have raised the interest on home loans by 10 basis points, signalling an end to more than a decade of cheap home loans that has in part fuelled the dizzying rise of property prices in the city.
Existing homeowners, who have an outstanding HK$1.258 trillion (US$163 billion), have not yet felt the pain but can expect to pay more too, with banks expected to increase their prime rate by the end of this month – the first rise in 12 years.
After Citibank increased its mortgage rates for new borrowers by 10 basis points on Tuesday – Hang Seng Bank, HSBC and Bank of China (Hong Kong), Standard Chartered, and Bank of East Asia, said in separate statements late on Wednesday night they too would be raising their mortgage rates by 10 basis points from next Monday.
Wing Lung Bank and China Construction Bank (Asia), however, said their increases would be effective from Thursday.
Five more banks joined the rate rise on Thursday. While OCBC Wing Hang Bank and Fubon Bank said they would increase their mortgage rates from Friday, ICBC Asia, China Citic International, Dah Sing Bank will increase it from August 13.
DBS on Friday also announced it would increase its mortgage rates by 10 basis points from August 20.
Chong Hing Bank on Friday also said it would increase its Hibor-linked mortgage cap to 2.35 per cent on Monday but will keep its prime rate-linked mortgage rate unchanged at 2.25 per cent.
