Hang Seng, Chase Manhattan copy HSBC mortgage rate rise

Two more banks have followed Hongkong Bank's move to raise minimum residential mortgage lending rates by 25 basis points, putting pressure on other banks to follow suit.

Hang Seng Bank lifted its home loan rate to between 9.25 and 9.75 per cent from between 9 and 9.5 per cent previously.

The bank's manager for media and investor relations, Cecilia Ko, said the adjustment was made in response to changes in market conditions.

She said while the 9.25 per cent rate was offered to preferential customers with a good relationship with the bank, there would still be exceptional cases in which very privileged customers could enjoy a 9 per cent rate.

Ms Ko said the bank would enforce strict criteria to assess borrowers' debt repayment capability when approving loans at 9 per cent. She said Hang Seng would continue to monitor the market closely and adjust its mortgage rates whenever necessary.

Chase Manhattan Bank also said its retail mortgage rates would be lifted to between 9.25 and 9.5 per cent from the previous 9 to 9.25 per cent. The new rates will come into effect from September 1.