Hongkong and Shanghai Banking Corp, the city's biggest lender, will increase mortgage rates for new homebuyers from Monday, a move industry figures believe others will follow. HSBC is the first big bank to declare a rate increase since the US Federal Reserve cut rates last month. The Bank of China (Hong Kong) and Hang Seng Bank are reviewing their rates. HSBC said yesterday it would raise its mortgage rate for new homebuyers from 4.62 per cent to 4.75 per cent. An additional 0.5 per cent rebate will be offered to homebuyers for loans of more than HK$1 million. An HSBC spokeswoman said the revised offer was in line with the market. The increase means a new homebuyer borrowing HK$1 million over 20 years will pay HK$70 more per month and about HK$17,000 more over the term of the loan. Standard Chartered Bank, Bank of East Asia, DBS Bank, Chong Hing Bank and Citibank have raised mortgage rates or slashed cash rebates in recent weeks. Their latest mortgage rates are mostly 4.75 per cent. Major lenders have been hesitant to raise the mortgage rates for fear of losing market share. BOCHK had the biggest share of the local mortgage market as of September with 13.8 per cent, followed by Standard Chartered Bank's 12.4 per cent and Hang Seng Bank's 9.6 per cent. HSBC slipped from market leader with 17.6 per cent last year to rank fourth at 9.5 per cent. 'We need to watch out for interbank rates movement next week. They have been softened a bit these days,' said Hang Seng Bank chief executive Raymond Or Ching-fai. A BOCHK spokeswoman said the bank's mortgage rate remained unchanged, but it was closely monitoring the market. Bank of East Asia, the first lender to announce its mortgage rate increase after the US rate cut, said it had no plans to update the existing mortgage offer. Other mid-sized lenders have not ruled out another rate increase if the interbank rates continued to stay high. 'It's not reasonable to see banks' mortgage rates even lower than interbank rates ... I think the remaining lenders are likely to follow suit,' said DBS managing director Sunny Cheung. Meanwhile, the value of new loans approved fell 21.9 per cent to HK$15.1 billion last month, according to the latest survey results by the Monetary Authority. The decline is the biggest in a year, mainly from decreases in approvals for all types of property transactions. New applications decreased 25.4 per cent.