Citibank lifts mortgage rates

Business | Samantha Wong 8 Aug 2018

Citibank yesterday raised the mortgage rate from 2.15 percent to 2.25 percent, or decreased the the best lending rate from prime minus 3.1 percent to prime minus 3 percent.

Citibank's prime rate currently stood at 5.25 percent, while the prime rate of some other major banks stood at 5 percent.

For mortgage rates based on the Hong Kong Interbank Offered Rate, Citibank increased the capped HIBOR rate from 2.25 percent to 2.35 percent.

Centaline Mortgage Broker's managing director Ivy Wong Mei-fung said more banks are expected to increase mortgage rates, as the market is expecting a rate hike in the United States in September. Thus, HIBOR will also increase, she added.

Wong said the rise in rates will most likely affect new mortgage lenders. The one-month HIBOR, which is linked to mortgage borrowing costs, stood at 1.392 percent yesterday. Interest rates on HIBOR-based mortgage loans are usually one-month HIBOR plus 1.3 to 1.4 percentage points, but capped at 2.25 percent by most banks.

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