Hong Kong mortgage holders are seeking to take advantage of lower American mortgage interest rates by switching their loans into US dollar denominated mortgages, according to Bank of East Asia chairman David Li Kwok-po.
The Hong Kong dollar lending rate is higher than that for US dollar loans as a result of recent activity in the local interbank market amid the regional crisis which last week pushed the Hong Kong dollar interest rate as high as 15 per cent.
The Hong Kong domestic mortgage rate is 11.75 per cent compared with the fixed mortgage rate of 7 per cent in the US.
Hong Kong Monetary Authority chief executive Joseph Yam Chi-kwong last week said howeowners considering borrowing via US dollar denominated mortgages would enjoy a cheaper interest rate.
Mr Li said some customers had requested US dollar mortgages but he believed it would not become a trend.
'You need to believe that the peg link will not change to borrow 15-20 year mortgage loans in US dollars,' he said.
