HSBC ends fixed-rate mortgage in Hong Kong a week after Fed’s rate rise
The move comes as the number of fixed-rate home loans being approved increases as buyers seek safety from further Fed rate increases
HSBC, Hong Kong’s biggest lender, will stop offering its fixed-rate mortgage plan on Thursday, a week after the US Federal Reserve raised its key interest rate by 25 basis points.
The move comes at a time of fierce competition between banks in Hong Kong to attract mortgage customers. The number of fixed-rates home loans being approved has increased as buyers seek some protection from the possibility of future central-bank rate increases.
Although popular with homebuyers at times of rising borrowing costs, the profit margin on fixed-rate mortgages for the lender gets squeezed every time there is an increase is the base rate.
That could explain HSBC’s decision to withdraw the fixed-rate home loan, according to Frankie Wong, chief operating officer of Hong Kong-based Pan Asian Mortgage.
“It may reflect the rising funding costs, or possibly the quota has been oversubscribed,” said Wong.
A spokesman from HSBC said the deadline for applications for the fixed-rate home loan would be the end of this month as planned, and successful applicants must have the mortgage drawn down on or before June 30. Friday is the beginning of the long Easter holiday weekend, so Thursday is effectively the last opportunity to apply. The scheme opened for applications on February 14.
