It is expected to increase by P0.25% next month, and citizens will pay higher interest rates for housing mortgages

28Hse Editor  2022-11-25  #Transaction

The 1-month interest rate rises above 4% to a 14-year high, and banks are likely to transfer costs

The Hong Kong Interbank Offered Rate (HIBOR) continued to rise. The one-month mortgage-related interest rate rose by 4% yesterday to 4.05%, which continued to reach a new high in more than 14 years, and was significantly higher than the current actual mortgage rate of 2.875% to 3.375%. Banks are bound to pass on the cost. Some people in the industry predict that after the U.S. interest rate meeting in mid-December, local banks will raise the prime interest rate (P) by no less than 0.25%, and the H mortgage ceiling will increase the actual interest rate to 3.625%. Compared with the low interest rate at the beginning of last year, it has increased by 33.1%. Based on the same loan of 5 million yuan, the monthly payment has increased by nearly 6,000 yuan. With the current price increase of various public utilities and services, increasing the interest rate may become the last straw that overwhelms the mortgagee. ◆reporter Li Zitian

Minutes of the Federal Reserve's interest rate meeting released yesterday showed that although officials indicated that future interest rate hikes would be smaller, they still said they did not see signs of weakening inflation. The rate-setting Federal Open Market Committee (FOMC) is widely expected to cut its hike to 50 bps in December after raising rates four times in a row by 75 bps.

Fed rate hikes showing no signs of stopping

Driven by the expectation that the U.S. interest rate will continue to rise, the interbank interest rate in Hong Kong continued to rise yesterday, and the one-month interbank interest rate related to mortgages rose by more than 4%, reaching 4.05024%, which is since October 17, 2008 (4.19%) After that, it reached a new high in more than 14 years. The three-month interest rate rose to 5.2%, a new high in more than 15 years since October 18, 2007 (5.41%).

A few days ago, Standard Chartered Bank couldn't bear it anymore and raised the cap interest rate of H mortgages by 0.25%. Market participants also expected that after the Fed raises interest rates next month, it will also stimulate Hong Kong's interbank interest rate to rise. The prime rate will be raised by 0.25%. After adding P, it also means that the ceiling of H mortgage will be moved upwards, which will increase the contribution of the mortgagee.

Nearly 30% more contributions within two years

Assuming a loan amount of RMB 5 million and a term of 30 years, based on the one-month interest rate of 0.15% in early 2021, the actual H mortgage rate is 1.45% (H+1.3%), and the monthly payment is RMB 17,991; the current one-month interest rate It has exceeded 4%, calculated based on the highest capped interest rate of P-2.25%, the actual interest rate is 3.375%, and the monthly payment has increased to 23,208 yuan, a difference of 5,217 yuan or 28.9% from the beginning of last year. If the Bank of Hong Kong adds another 25 basis points after the U.S. interest rate meeting in December, the capped interest rate will be 3.625%, and the monthly payment will become 23,940 yuan, a difference of 5,949 yuan or 33.1%, which is enough to rent a room in the urban area. Fine tenement unit.

Cao Deming, chief vice president of Meridian Mortgage Referral, pointed out that the recent rise in interest rates is due to the fact that banks are affected by seasonal factors near the end of the year.financial constraints. He mentioned that the Hong Kong Monetary Authority started receiving money at 41 degrees on May 12, and the balance of the Hong Kong banking system has dropped to about 96.5 billion yuan. The market expects the Federal Reserve to continue raising interest rates by 0.5% next month, and the interest rate gap between Hong Kong and the United States will further widen. , coupled with the decline in bank balances, lending rates are naturally high. Under the pressure of capital costs, some large banks have recently raised the upper limit of the locked interest rate of H mortgages by 0.25%. He predicts that the Hong Kong bank will increase the prime interest rate next month, and the increase is estimated to be about 0.25%. In the case of rising interest rates, it will further push up the actual interest rate level of new mortgage customers.

Banks are forced to raise interest rates

Wang Meifeng, managing director of Centaline Mortgage, also predicts that after the U.S. interest rate meeting in mid-December, local banks will raise the prime interest rate again, and the increase in P is expected to be no less than 0.25%. She said that the interbank offered rate is affected by factors such as the US interest rate level, local Hong Kong dollar supply and demand, seasonality, and financial investment environment. If the interbank rate continues to rise, it will often lead to banks raising fixed deposit rates to absorb deposits. These situations reflect the overall cost of funds of banks Already rising, there is a need to increase interest rates.

Wang Meifeng also said that the current balance of the banking system in Hong Kong has fallen below the level of 100 billion yuan to 96.5 billion yuan, and the interbank interest rate has risen to the level of the US interest rate; the one-month interbank interest rate exceeded 4% yesterday, which is significantly higher than the market interest rate of 2.875 1% to 3.375%, and the interest rate of some fixed deposits has also exceeded 4%, all of which reflect that the mortgage business of banks is really "losing money". As the overall cost of funds has risen, mortgage interest rates are under upward pressure.

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