In earlier, some banks tightened the mortgage approvals for commission income people. Recently, HSBC increases HIBOR to cut a rebate in disguised form. It is reported that the interest rate of small loans below HKD6 million is increased by 0.1%, which is the full period H+1.4% increasing to H+1.5% at the beginning of this month. There is an increase of 0.2% from H+1.3% at the beginning of May. And the extra monthly installment payment for the loan of HKD4 million is nearly HKD396. The cash rebate also dropped from 0.5% to 0.2%. Some analysts expect other banks to continue to be cautious about approving the mortgages and adjusting the relevant discounts, with the rising market risk and the weakening of the market absorption. Journalist Ma Chui-Mei
According to a market source, HSBC raises the mortgage interest rate on first-hand properties. The mortgage interest is H+1.5%, and the cash rebate rate is 0.2% of the loan amount for small loans of HKD1-6 million. The mortgage interest is H+1.45%, and the cash rebate rate is 0.5-0.8% of the loan amount for loans of HKD6-20 million. The mortgage interest is H+1.4%, and the cash rebate rate is 1% for loans above HKD20 million. The highest rate is 2.5%. An HSBC spokesman said that the bank regularly reviews the mortgage interest rate, cash rebates, and other concessions, and makes adjustments based on market conditions.
The extra repayment for borrowing HKD4 million in 30 years is HKD142, 500.
HSBC's interest increase for small loans under HKD6 million is 0.1%. The effective actual interest rate will be 1.97%, base on the monthly Hibor of about 0.47% on the previous trading day. The monthly installment payment will increase by HKD49 for each HKD1 million loan for 30 years. The full period of interest will increase by nearly HKD17,900. Base on an HKD4 million loan, the extra monthly installment payment will be nearly HKD200, and nearly HKD71,500 more of interest in the whole period. Compared with the mortgage plan of H+1.3% at the beginning of last month, the monthly installment payment will increase by HKD99 for each HKD1 million loan for 30 years, with an extra nearly HKD35,600 in the whole period. Base on an HKD4 million loan, the extra monthly installment payment under the new plan will be nearly HKD396, and nearly HKD142,500 more of interest in the whole period.
The Managing Director of Centaline Mortgage, Wong Mei-Fung, believes that the Bank cost of funds may not be able to fall synchronously as the economic weakening and interest rates falling, resulting in reduced mortgage profits and narrowed net interest margins. She considers the major banks to take the lead to adjust the mortgage interest rates because of the above reasons. Banks may be more conservative about property mortgages or tend to raise interest rates and cut concessions. She also points out that the major banks' adjustment is often indicative, and it is expected that other banks will follow in the current environment on the safe side.
However, Wong Mei-Fung believes that major banks' housing mortgage adjustments will have little effect on the property market. She explains that although the bank raised the H interest rate, the actual rate of increase was still relatively small, based on the cumulative interest rate increase of 0.15% to 0.2% for the first-hand properties by banks this year. The drop in HIBOR has caused the H mortgage interest rate to fall more than 0.5%, offsetting the interest rate increase of banks' interest increase. The adjusted H interest rate is between 1.92% and 1.97%, which is still significantly lower than the 2.5% H mortgage interest rate in the first quarter.
The decrease of Hibor has offset the banks' interest rate hikes.
The Chief Vice President of mReferral Mortgage Brokerage Services, Cho Tak-Ming, believes that other banks may follow the tightening of mortgage discounts, as the weakening of the cost of capital in the banking industry relative to marginal profit and the risk.
He points out that banks strengthened risk management under global economic instability. It is estimated that banks will continue to be cautious about approving mortgages and slightly adjust the related discounts because the bank's mortgage business is still high in capital costs but low in profits under the current low-interest-rate environment.
Cho Tak-Ming, also points out that the bank tightened the mortgage interest rate and discounts, but the current interest rate has been low. The actual interest rate is still about 0.53% lower than the highest rate of 2.5%, based on the Hibor of 0.47% and H+1.5%. He expects there is still room for the Hong Kong dollar Hibor to fall as the continued fund inflows into Hong Kong. So, it is estimated the banks' continued slight adjustment on the mortgage interest rate will not have too much impact on people under mortgage repayment for the time being.
