HONG KONG – Hong Kong's banks, blindsided by rising funding costs due to the city's costly defense of its currency peg, are clamping down on popular fixed-rate mortgages. Bank of East Asia Ltd. is no longer accepting applications for these home loans "due to recent movements in interest rates," the lender said in an emailed reply on Friday, more than two months before it had originally planned to end the program. Industrial & Commercial Bank of China (Asia) Ltd. will stop from May 1. Bigger rivals HSBC Holdings Plc and BOC Hong Kong (Holdings) Ltd. stopped offering fixed-rate mortgages last month. These loans were provided at 1.68 percent for the first year of a new mortgage, lower than the 2.15 percent rate that currently prevails in the industry, according to data from Centaline Mortgage Broker Ltd. The discount became unsustainable as Hong Kong's interbank rates are rising, with the three-month borrowing cost having hit the highest since December 2008 and the monetary authority warning Thursday that costs are expected to climb.
Apr-20-2018, 15:00:11 GMT