Staff reporter
The Hongkong and Shanghai Banking Corporation has relaunched fixed-rate mortgage plans after a halt for over one month amid market uncertainty.
The major lender announced yesterday a new fixed-rate mortgage plan that offers a rate of 3.18 percent for the first three years or 3.03 percent for the first five years, about 32 to 47 basis points lower than the current market level of around 3.5 percent.
For a homebuyer with a HK$5 million loan over 30 years, HSBC's new three-year fixed-rate plan would help save the monthly repayment by HK$883 or 3.9 percent to HK$21,569, and the 5-year fixed rate of 3.03 percent lowers the monthly repayment by HK$1,291 or 5.8 percent to HK$21,161, according to mReferral's calculations.
Though the fixed-rate plans only accounted for 0.6 percent of all mortgage loans in December, mReferral expects HSBC's offers would attract some homebuyers as they can repay fewer interests and thus could support the property market.
With the slower pace of US interest rate cuts, local mortgage rates in Hong Kong are expected to drop to around 3.25 percent by mid-year gradually and remain above 3 percent throughout the year, according to Centaline Mortgage.
In early January, HSBC and Bank of China Hong Kong (2388) were reported to have suspended their fixed-rate mortgage plans due on December 31, as borrowers preferred the plans based on floating interest rates for the time being.
