Four major lenders raised mortgage interest rates yesterday, following a decision by Bank of China (Hong Kong) to tighten mortgage terms at the weekend. Standard Chartered Bank, Dah Sing Bank, Bank of East Asia (BEA) and DBS Bank raised their mortgage rates by 25 basis points in the second round of rate rises in the past three weeks. Wing Lung Bank raised its rates on Monday. Effective mortgage interest rates at these banks now range from 3.75 to 4.25 per cent. The lenders also cut cash rebates. BEA reduced its rebates to between 0.1 and 0.4 per cent of a loan amount while DBS cut its rebates by 0.2 percentage point to a maximum of 0.4 per cent. Standard Chartered eliminated rebates entirely. Dah Sing kept its 0.3 per cent rebate unchanged. Other lenders such as the Industrial and Commercial Bank of China (Asia) (ICBC) and Citic Ka Wah Bank say they will continue to monitor market conditions before making changes. ICBC deputy general manager Stanley Wong Yuen-fai said that as rates had risen substantially on the interbank market - where banks go for mortgage funds - the across-the-industry mortgage rate rise was not a surprise. Mr Wong said that after the latest adjustment, the mortgage spread for most banks had returned to a 'normal' level. Further rate rises would depend on the movement of the Hong Kong interbank offered rate. CLSA analyst Dominic Chan said the rate rises would bolster profitability in the sector.