After a long period of flat lining at very low levels, HIBOR interest rates have risen. This has the effect of raising interest rates on new and existing mortgages. Given that most HIBOR based mortgages are based on either 1 month or 3 month HIBOR (i.e. they are floating rate mortgages), this means a near immediate increase in the interest rates payable on these mortgages. There has been no effect on on the more expensive prime-linked mortgages.
In practical terms, all of our mortgages are HIBOR linked and the latest round of resets has seen the rates we are paying increase from a range of (around) 0.7-0.9% to (around) 0.9 - 1.2%. By any standards these are still very low rates and do not even come close to reversing our monthly cash surplus on our investment properties.
The open point is whether the increases are a response to rising short term rates in other markets or a more specific local response to the amount of money being tied up in applications for shares in Agricultural Bank of China's initial public offer. If the latter, there should be a decline in HIBOR after the refund cheques are issued.
No comments:
Post a Comment