FINANCIAL SERVICES | Staff Reporter, Hong Kong

Banks raise mortgage rates as HKMA implements new measures

The HKMA raised risk-weighted floor to 25% for new residential loans.

According to Reuters, some of Hong Kong's largest commercial banks in the mortgage loans market said they would raise interest rates following the latest round of mortgage tightening measures by the city's de facto central bank.

Banks have to set aside more capital when they lend after the Hong Kong Monetary Authority (HKMA) raised the risk-weighted floor by 10 percentage points to 25 percent for new residential mortgage loans last Friday. The HKMA also restricted the amount of loans some property buyers can get when it lowered the loan to value ratio by 10 percentage points, and trimmed the debt servicing ratio, added Reuters.

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