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Adjustable Mortgage Interest Rates in HK Posted by Cosmographer (108 days ago) Anyone know by how much the mortgage interest rates in HK fluctuate? We're considering buying a property in Happy Valley, and at the current rates, it is easily affordable. However, if the rates rise to say 6% - 8% or more, we would be in a very difficult position. Find what you are after in our Hong Kong A-Z Directory  Posted by F355 (108 days ago) i am in hk since 12 years and the interest rate was never higher than 4% Posted by walkup2 (108 days ago) You could also fall sick and lose your job which are also unlikely but also a statistical possibility. It is possible to take out insurance against the above as well as a hedge against interest rates rising to a particular level. Banks are only too happy to sell these add-ons when selling a mortgage. I don't think however you can hedge against getting a divorce.....(apart from a pre-nup) Posted by ding dong (108 days ago) Interest rates were about 11% in 1997 at the peak of the property market Posted by Cosmographer (108 days ago) Is there a site where we can actually see the year to year fluctuation? I'd like to know if the 11% was a short term spike or if rates gradually built up to that. In other words, I'd like to assess the level of risk involved in purchasing an adjustable rate mortgage. Posted by walkup2 (107 days ago) I am not sure how useful it is for you to look backwards in calculating risk forwards. You may be better off asking for a quote selling the risk on interest rates moving above 5.5% going forwards at any time over a set period with the premium based on the capital figure of the mortgage loan. It is this risk premium which will inform you the actual risk you are taking. Alternatively just ask say HSBC if they are prepared to sell you a fixed rate mortgage. Posted by sxc (107 days ago) HK interest rates move pretty much in line with the US interest rates due to the pegging of the HKD to USD. So if you know anything about volatility in US interest rates, HK rates will follow/ Posted by Cosmographer (105 days ago) Thanks to all the replies. I'm not too familiar with the US interest rates either. Everyone I talk to seems to think that I should be more worried about a possible correction in real estate prices rather than interest rates. But the way I see it, we can wait out any downturn in the market. But if interest rates shoot up, we won't be able to wait out the market as the monthly payments would become much too high. Posted by walkup2 (103 days ago) Yes there is a risk. There is always a risk. You have 3 choices. You either assume the risk, hedge (insure) against the risk, or you do not trade (buy). A 5% risk say is still a risk and looks different when seen as a 1/20 chance (or 1 year in every 20). Car insurance is a hedge against having an accident and is a lot less than 1/20 every time you take a trip...but every day someone somewhere dies in a car accident. There now that should make you feel better! Posted by associates (103 days ago) Interest rates in Hong Kong are typically not fixed and therefore could very well rise with the strengthening of the US dollar which will certainly happen outside the next 8-12 months. There are strategies that recognize this – consult a professional financial advisor to have you explain. By the way a bank teller selling hedge funds and cashing cheques, will have no clue! |
