HSBC Holdings will raise mortgage interest rates in Hong Kong by a maximum of 50 basis points, while trying to maintain its profit margin amid rising interest rates, a bank spokesman said.
New mortgage loans linked to HSBC’s Hong Kong Interbank Offered Rate (HIBOR) will be increased to up to 4.125% from 3.625%, effective September 18, according to the spokesperson.
“We have decided to review our mortgage rate after the last review, which takes into account a range of factors, including HIBOR, our competitiveness and market rates,”the spokesman said in a statement.
Hong Kong banks, including HSBC, had raised mortgage interest rates by 25 basis points last December, after the Central Bank of Hong Kong raised interest rates following the decision of the US Federal Reserve.
Interest rates in Hong Kong have been rising as its monetary policy moves in parallel with the United States, as its currency is pegged to the US dollar.
Interbank interest rates in Hong Kong have also risen this year. The one-month “highbore” index, the benchmark index that banks take as a reference for residential real estate loans in the city, reached 5.42988% on August 2, the highest level since mid-October 2007.
Official data showed that prices for private houses in the city fell for three consecutive months by July, as high interest rates and a weak economic outlook affected morale.
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