Effective yesterday, the lender boosted its mortgage rate to 2.5 percent, equivalent to prime minus 3 percent, from 2.4 percent, or prime minus 3.1.

"The cost of funds is really, really getting up," CCB (Asia) vice president Willa Wong told The Standard. "It's kind of tough, actually, to get money in the market." Wong said she would not rule out hiking mortgage rates again if funding costs continue to increase.

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Hongkong and Shanghai Banking Corp, Standard Chartered Bank (Hong Kong), Hang Seng Bank (0011), Bank of East Asia (0023), Chong Hing Bank (1111), ICBC (Asia) (0349) and CITIC Ka Wah Bank said they have no plans at present to raise mortgage rates but will closely monitor the situation. The three-month Hong Kong interbank offered rate (HIBOR) fell yesterday to 2.09 percent, from 2.26 percent on Wednesday.

Wong said CCB (Asia) is trying to get its prices in line with the general market, as it has had the lowest-priced offerings for quite some time. "Because the margin is decreasing, maybe it's time for us to ... adjust it to be in line with others' offerings right now," she said. "[But] we don't want to raise too much, because we want to maintain our competitiveness."

Hang Seng Bank and BOC (Hong Kong) (2388) are both well-positioned to benefit under the current interest rate environment, Cazenove analyst Lawrence Chen said, because they are less dependent on funding from the interbank market.