Last Thursday, the Federal Reserve raised interest rates once more by 0.75% as expected, and the federal funds rate was raised from 0 to 0.5% to 2.25 to 2.5% in just four months. The sum of 9 rate hikes in 36 months from December to December 2018. The magnitude and speed of interest rate hikes have frozen the second-hand housing market transactions.
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Today, most buyers are holding a wait-and-see attitude, worrying that the interest rate hike will greatly increase future contributions, and some are also worried that it will be more difficult to pass the stress test following the interest rate hike, and there will be insufficient opportunities to borrow. This time, the author will calculate with you how much the interest rate hike will affect the mortgage payment, the approval of the Shanghai Council and the property price.
When choosing a mortgage plan nowadays, most buyers will choose the Hibor Plan, which has the advantage of having a ceiling of P-2.5% of the best interest rate. Even if Hibor continues to rise, as long as P remains unchanged, the maximum payment Both are only 2.5 centimeters.
If Hong Kong banks follow the US to raise interest rates in the future, the monthly payment will increase. If you undertake a 20-year mortgage, for every 1% interest rate hike by the bank, your contribution expenses will increase by 10%, and if you undertake a 30-year mortgage, the contribution expenses will increase by 13%.
As for the stress test, even if Hibor continues to rise, as long as the prime interest rate P remains unchanged, the same salary can still be borrowed for the same amount of loan. For today, if you undertake a mortgage of 80% or less and calculate at P-2.5% for a 30-year term, for every 1 million yuan borrowed, the monthly income will be $9463, that is, if you need to borrow 5 million yuan, the bank requires you to Monthly income of not less than $47,315. If you undertake a 90% mortgage, for every 1 million borrowed, the monthly income will be $10,323, and if you borrow 5 million, the monthly income will be no less than $51,615.
But when the banks in Hong Kong follow the interest rate hike, if you want to successfully borrow a loan of the same amount, you will need a higher salary. If P increases by 1%, the monthly income will increase by regarding 11.3% to $10535 for every 1 million borrowed for 80% of the mortgage.
From the above data, it can be seen that buyers are worried regarding rising interest rates on future repayment pressures and the possibility of insufficient borrowing. It is understandable that they will be discouraged on the road to buying a property, but the question is whether local banks will raise interest rates by 1% or more.
The economic trend + the situation in the Taiwan Strait is more critical
Since May 12, the HKMA has received a total of regarding 175 billion yuan in 25 degrees. Today, the balance of the banking system has further dropped to regarding 150 billion yuan, but there is still a distance of tens of billions of yuan. For example, in September, the United States only If the interest rate is raised by half a percentage point, it is estimated that the banks in Hong Kong will not have the opportunity to raise interest rates until the end of the year at the earliest, and the rate of interest rate hike this year may only be 1/4% or even only 1/8%.
In addition, the market estimates that overall U.S. inflation may have peaked, and the Federal Reserve also turned “dove” when it announced the results of its interest rate meeting last week.
Therefore, the author believes that the impact of interest rate hikes on the property market is more psychological than actual. On the contrary, whether Hong Kong can clear customs as soon as possible, whether the global economy will decline next year, and whether there will be a war in the Taiwan Strait in the future, the above factors will have a greater impact on the future trend of the property market. .
King Sir
This column is published every other Tuesday
