HONG KONG (Reuters) -HSBC Holdings will raise its mortgage rates in Hong Kong by a maximum of 50 basis points, a spokesperson for the bank said on Monday, as it tries to maintain its profit margin amid higher interest rates.
New mortgage loans linked to the Hong Kong Interbank Offered Rate (HIBOR) from HSBC will be increased to as much as 4.125% from 3.625%, effective Sept. 18, according to the spokesperson.
“We have decided to revise our mortgage rate following a recent review, which takes into account a range of factors, including HIBOR, our competitiveness and market pricing,” the spokesperson said in a statement.
The move by the territory’s largest lender weighed on Hong Kong property developers’ stocks on Monday, with the market’s real estate gauge shedding 3.28%, compared with a 0.58% dip in the benchmark Hang Seng Index.
Sun Hung Kai Properties slumped 9.5% after the Hong Kong property giant reported a 17% decline in underlying profit for the year ended June.
Hong Kong banks, including HSBC, last raised mortgage rates by 25 basis points in December, after Hong Kong’s central bank hiked rates following the U.S. Federal Reserve. Interest rates in Hong Kong have been on the rise as its monetary policy moves in lock-step with the U.S., as its currency is pegged to the U.S. dollar.
Hong Kong interbank rates also spiked this year. One-month HIBOR, which is the benchmark banks take as a reference for residential mortgages in the city, hit 5.42988% on Aug. 2, the highest since mid-October, 2007.
Private home prices in the city had been declining for three consecutive months by July, official data showed, as high rates and a weak economic outlook weigh on sentiment.
Source: Economy - investing.com
