Zhongyuan Mortgage: Hong Kong banks promote fixed-rate mortgage plans to stabilize interest income, expected to not trigger an interest rate war

HSBC and BOC Hong Kong have successively launched fixed-rate mortgage plans, with a lock-in period of up to 5 years and fixed interest rates ranging from 3.15% to 3.35%, which is 0.525% to 0.725% lower than the current market interest rate of 3.875%. Wang Meifeng, Managing Director of Central Plains Mortgage, believes that Hong Kong banks have launched fixed-rate plans at the beginning of the rate-cut cycle to help stabilize future interest income for banks. She believes this will not trigger an interest rate war as the current cost of bank funds is still higher than before. Due to the complexity of calculations and administrative work involved, it is estimated that not many banks will introduce fixed-rate plans. Wang Meifeng reminds that fixed-rate mortgage plans do not offer rebates and are not linked to mortgage deposit accounts. After the fixed-rate period ends, the interest rate level may also be higher than that of floating-rate mortgage plans. She mentioned that the utilization rate of fixed-rate mortgages has been as high as nearly half in the past, and if the market response is good this time, the utilization rate of fixed-rate mortgages may increase to 10% to 20%. She also predicts that the Federal Reserve will still have a 1.5% rate-cut space in the next two years, but the rate reduction in Hong Kong will not be synchronized with the United States, and next year's interest rate may be around 3%