What different types of interest rates are and why they matter
Hong Kong’s banking regulator warns of mortgage rate rise, following an increase in base rate on Thursday in response to the Fed’s overnight move
The Hong Kong Monetary Authority (HKMA) raised its base rate by 0.25 percentage points on Thursday following the US Federal Reserve’s overnight move.
In announcing the decision, HKMA chief executive Norman Chan Tak-lam reiterated his warning to Hong Kong home buyers that mortgage rates will rise in the near future.
How would the change in base rate affect your mortgages?
Here are some key concepts that would help you understand the impact.
Hong Kong interbank offered rate (HIBOR)
Banks borrow and lend money between each other in the interbank market in order to manage liquidity and meet the reserve requirements by HKMA.