One-month interest rate drops to three-year low following seven-day decline

Hong Kong’s interbank offered rates remain under pressure, with the one-month rate – closely tied to mortgage rates – falling to a new three-year low at 0.56917 percent.

The overnight HIBOR dropped to 0.02336 percent, the lowest level on record since data began in 2006.

The one-month rate has dropped for a seventh consecutive day, bringing the actual mortgage rate to 1.87 percent.

For the monthly repayment on a 30-year mortgage of HK$5 million, for example, this translates into a nearly 20 percent monthly repayment reduction, according to Centaline Mortgage.

Morgan Stanley anticipates that HIBOR could rebound in the coming months as some excess liquidity in the market may be reabsorbed.

STAFF REPORTER