Meridian: HIBOR hit a new low in nearly 3 years in a short period of time and is still likely to drop to 0.5% or below

The Zhitong Finance App learned that today's HIBOR report for 1 month was 0.56%, falling for 5 consecutive working days, hitting a new low after June 15, 2022. Cao Deming, chief vice president of Meridian Mortgage Referral, said that based on the current “H +1.3%” calculation for newly built H plans, the actual interest rate for H has dropped to 1.86% today, hitting a new low of nearly 3 years. Cho Tak Ming believes that future HIBOR trends will depend on market activity and demand for the Hong Kong dollar. If the aggregate balance of the banking system remains above HK$100 billion, HIBOR is still likely to drop to 0.5% or below in the short term.

H is reduced by 1.64% compared to the 3.5% capped interest rate according to actual interest rate. Interest expenses for building owners can be reduced immediately, which has a positive effect on the property market. With a loan amount of 5 million and a term of 30 years, using today's H margin of 1.86%, the monthly payment is HK$18,133. Compared with the 3.5% capped interest rate, the monthly payment is HK$2,452, which can reduce the monthly payment by HK$4,319, or 19.2%.

Cao Deming pointed out that although HIBOR is currently at a low level, it should be noted that HIBOR is easily affected by capital market activity and fluctuates greatly, so those interested in buying a home still need to regularly observe market trends. However, according to H, there is generally an interest rate lock limit for building suppliers. Even if interest rates are likely to rise in the future, owners can continue to use a capped interest rate. It is an “aggressive, retractable” mortgage plan.

Also, according to the March Hong Kong Monetary Authority Residential Mortgage Survey, H was 91.8% according to the selection ratio, up 1.4% from the previous month. However, the H press capped interest rate is generally the same as the P press rate. Currently, HIBOR has declined, and the H press advantage is immediately evident. In addition, applications for fixed subscription plans previously introduced by major banks were closed last month. Cao Deming expects that H will dominate the market in the future, and H will rise back to 95% or more according to the selection ratio.