Mortgage rates up in Hong Kong
Hong Kong's DBS Bank and Bank of China have increased their HIBOR-based housing loan rates for the second time in a month.
The new interbank offered rate at BOCHK, which is the SAR's second largest mortgage provider, took effect on 13 May 2011.
The new rate, which is the highest in the industry, rose to HIBOR plus 1.3 percent to 1.7 percent capped at prime minus 2.65 percent from HIBOR plus one percent to 1.5 percent with a cap at prime minus 2.7 percent in mid-April.
Hongkong and Shanghai Banking Corp (HSBC) asking for HIBOR plus 1 percent to 1.5 percent capped at prime minus 2.8 percent, is similar with that at Standard Chartered Hong Kong.
Last week, the one-month HIBOR stood at 0.18893 percent.
A bank spokesperson said that the decision to increase the rate came after "considering the market situation and the higher capital cost". Prior to the last change in April, BOCHK's rate stood between HIBOR plus 0.9 percent and HIBOR plus 1.2 percent.
Meanwhile, DBS Bank (Hong Kong) increased its HIBOR plus rates to between 1.3 percent and 1.7 percent, although its cap remained at prime minus 2.8 percent. A cash rebate of up to five percent was also offered by DBS.
William Leung Wing-cheung, Executive Director at Hang Seng Bank said the rate increases represent the impact of rising capital costs, with lenders marking up lower-priced loans.
Standard Chartered earlier predicted the HIBOR-based rate will test HIBOR plus 1.75 percent to two percent.
Bank of East Asia has not changed its rates after increasing it from HIBOR plus 1.3 percent to HIBOR plus 1.5 percent.
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