Why Hong Kong banks are reluctant to follow US in hiking rates

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Why Hong Kong banks are reluctant to follow US in hiking rates

According to the Hong Kong Monetary Authority, the ratio of new mortgage loans priced with reference to HIBOR increased to 95.1 percent in December last year while number of new mortgage loans priced on prime rates dropped to 2.5 percent.

[aussie_oi_oi_oi]

1M HIBOR (which most HIBOR mortgages are priced in) hit a YTD low of 0.49% yesterday, this is from 0.75% at the start of the year and even lower than when the FED hiked in Dec last year.

Get your money whilst it's cheap!

[Morrison]

1 FED rate hike this year.

[bdw]

1M HIBOR (which most HIBOR mortgages are priced in) hit a YTD low of 0.49% yesterday, this is from 0.75% at the start of the year and even lower than when the FED hiked in Dec last year.

Get your money whilst it's cheap!

I've had my HKD mortgage for 8 years now and at the time I got it the Hibor was quite a new concept and everyone had prime loans. I got a H + 0.7% loan which was considered risky any very volatile. Everyone said the Hibor is cheap now but will shoot up again and in the long term not a good option. They then came out with these caps so whilst I have a H + 0.7% loan, its capped at prime - something (I forgot what it is because I've never needed it).

Fast forward 8 years to today and everyone has hibor. For 7.5 of the last 8 years the hibor has been under 0.3%, meaning my mortage H+0.7 is effectively around 1%. Now you say 0.49% is a YTD low which is true, but for me its still the highest its been looking back over the last 8 years. So now my mortgage is 1.2%, Still bloody good though.

[Morrison]

Original Post Deleted

I have not looked into it in great detail, it's just a gut feeling I have.
mainly based on two things:
Looking at the exchange rates, US does not want the US dollar any stronger.
Secondly, the US job market is one of FED's main priorities.
The jobless rate is at around 5% but you also need to look ag how this number has been "achieved".

Americans Not In The Labor Force Soar To Record 95.1 Million: Jump By 446,000 In One Month | Zero Hedge

[civil_servant]

https://www.stlouisfed.org/on-the-ec...icipation-rate

It's not so simple. The labour participation rate shouldn't be confused with people being out of jobs. There are valid reasons why one wouldn't participate.

[aussie_oi_oi_oi]

I've had my HKD mortgage for 8 years now and at the time I got it the Hibor was quite a new concept and everyone had prime loans. I got a H + 0.7% loan which was considered risky any very volatile. Everyone said the Hibor is cheap now but will shoot up again and in the long term not a good option. They then came out with these caps so whilst I have a H + 0.7% loan, its capped at prime - something (I forgot what it is because I've never needed it).

Fast forward 8 years to today and everyone has hibor. For 7.5 of the last 8 years the hibor has been under 0.3%, meaning my mortage H+0.7 is effectively around 1%. Now you say 0.49% is a YTD low which is true, but for me its still the highest its been looking back over the last 8 years. So now my mortgage is 1.2%, Still bloody good though.

well timed sir!

right now the best pricing for new mortgage applications is around H+1.3%, effective cap (based on the various primes) is around 2%

if im not mistaken, hsbc staff can still get 0.5%+HIBOR whilst SCB staff can get 0.8%+HIBOR today, but of course you cant change jobs

[aussie_oi_oi_oi]

Original Post Deleted

a secured loan is almost always cheaper than an unsecured one. longer tenor too.

all these P-loan / tax loans in the retail market sounds like (im not an expert) they are all fixed, so their pricing is inevitably going to be higher than a loan with security and tenor will be shorter (credit risk)

what you mention is pretty common - i am actually in the process of doing this right now.

[bdw]

Original Post Deleted

A quick and simple method you can do now is get an unsecured 'tax loan' at rates of around 1.5% - 2% for terms of 1-5 years very quickly and easily by just walking into a bank and showing your HKID and last few tax returns/salary slips. I have done this just in the last month, borrowed money in HK at under 2% for the purpose of paying off a big chunk of a mortgage I have in Australia now which is at a rate of 4.34%. There are a few other threads around here about tax loans and premium deposits where I have posted a lot of details.

A more complicated way is you can take out a full blown overseas property mortgage and there are some banks offering this.

[bdw]

a secured loan is almost always cheaper than an unsecured one. longer tenor too.

This is true. However an unsecured loan in a place like HK can be a lot cheaper than a secured loan in a place like Australia.