--- title: "\"Hong Kong Property\" Meridian: The room for a significant decline in HIBOR is limited, expected H to maintain the interest rate at 3.25%" type: "News" locale: "en" url: "https://longbridge.com/en/news/294300781.md" description: "HSBC's best lending rate remains at 5%. The urgency for interest rate hikes has diminished due to U.S. non-farm payroll and inflation data falling short of expectations, but geopolitical factors and inflation targets still suggest the possibility of defensive rate hikes within the year. The Hong Kong HIBOR has limited room for significant decline due to the limited surplus in the banking system, and it is expected to hover between 2 to 3 cents in the short term, making it difficult for H mortgage rates to decrease. Fixed-rate mortgage applications have been extended, and the proportion of selections may rise to 30%. Experts advise mortgage holders to develop long-term financial plans to avoid over-borrowing" datetime: "2026-07-30T04:30:45.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/294300781.md) - [en](https://longbridge.com/en/news/294300781.md) - [zh-HK](https://longbridge.com/zh-HK/news/294300781.md) --- # "Hong Kong Property" Meridian: The room for a significant decline in HIBOR is limited, expected H to maintain the interest rate at 3.25% The Federal Reserve announced that the benchmark interest rate will remain in the range of 3.5% to 3.75%. In Hong Kong, HSBC announced today (30th) that the prime rate (P) remains unchanged at the current level of 5%. Cao Deming, Chief Vice President of the Mortgage Referral Division, stated that the U.S. non-farm payrolls added only 57,000 jobs in June, far below the market expectation of 110,000. On the other hand, inflation has also eased, with the U.S. Consumer Price Index (CPI) growing by 3.5% year-on-year in June, and the core CPI increasing by 2.6% year-on-year, both of which are below market expectations, weakening the urgency for interest rate hikes. However, it should be noted that the new Federal Reserve Chairman still insists on a long-term inflation target of 2%, and with recent geopolitical tensions rising again, if future inflation data surges again, the Federal Reserve does not rule out the possibility of initiating a "defensive" interest rate hike within the year. Therefore, close attention must be paid to the trend of inflation data. In Hong Kong, the one-month Hong Kong Interbank Offered Rate (HIBOR) is reported at 2.68%. Cao Deming indicated that based on the current general new H mortgage plan at H+1.3% and a capped interest rate of 3.25%, HIBOR needs to fall below 1.95% for the actual mortgage interest rate and monthly mortgage payments to decrease further. However, U.S. interest rates have not yet fallen, and the surplus in the local banking system remains around HKD 54.1 billion, limiting the room for a significant drop in HIBOR. It is expected that HIBOR will hover around 2% to 3% in the short term, and homeowners will still need to pay their mortgages at the capped interest rate in the short term. Additionally, the proportion of customers opting for fixed-rate mortgages has exceeded 20%. Three banks have extended the application date for their fixed-rate mortgage plans to August 31 this year, with some banks extending the application date for designated properties to September 30 this year. Given the limited room for a significant drop in interbank rates in the short term, it is anticipated that the number of customers choosing this plan will continue to increase, and the proportion of fixed-rate mortgage selections may challenge 30%. The direction of U.S. interest rates and monetary policy still has uncertainties. Cao Deming advises mortgage borrowers to have a long-term and stable financial plan. Prospective buyers should also regularly monitor interest rate trends before entering the market, avoid borrowing to the limit when applying for a mortgage, reserve sufficient funds, and choose suitable and affordable properties based on their own capabilities ### Related Stocks - [HSBC.US](https://longbridge.com/en/quote/HSBC.US.md) - [HSBH.US](https://longbridge.com/en/quote/HSBH.US.md) - [00005.HK](https://longbridge.com/en/quote/00005.HK.md) - [HSBA.UK](https://longbridge.com/en/quote/HSBA.UK.md) - [DTIW.SG](https://longbridge.com/en/quote/DTIW.SG.md) ## Related News & Research - [BREAKINGVIEWS-HSBC’s Aussie retail exit looks like a dud deal](https://longbridge.com/en/news/294475540.md) - [HSBC Confirms Total Voting Rights Following Share Capital Update](https://longbridge.com/en/news/294524609.md) - [FinArc Investments Inc. 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