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The following is issued on behalf of the Hong Kong Monetary Authority:
The Hong Kong Mortgage Corporation Limited (HKMC) announced today (October 21) the launch of a special scheme under the Corporation's Fixed Adjustable Rate Mortgage (FARM) Programme, promoting mortgage loans with fixed-rate periods from one to ten years. There are 10 banks which will be participating in this special scheme, namely Bank of China (Hong Kong), Bank of East Asia, CCB(Asia), DBS (Hong Kong), Dah Sing Bank, Hang Seng Bank, HSBC, ICBC(Asia), Standard Chartered Bank (Hong Kong) and Wing Hang Bank.
The HKMC pioneered the FARM Programme in March 1998 to promote fixed-rate mortgage loans as an alternative choice of mortgage financing, offering home buyers protection against adverse movement in interest rates. Under the special scheme, borrowers in respect of owner-occupied properties can apply for mortgage loans for fixed-rate periods of 1, 2, 3, 5, 7 and 10 years with the following mortgage rates:
FARM Period Mortgage Rate Mortgage Rate after
(% per annum) FARM Period
1-year 1.25%
2-year 1.75% The then prevailing HKMC
3-year 2.35% FARM Rate
5-year 3.18% or
7-year 3.58% HKMC Prime Rate minus
10-year 3.78% 3% per annum
With fixed rate mortgages, the mortgage borrowers can lock in a predetermined mortgage interest rate and be insulated from any volatility in interest rates during the chosen fixed-rate period. At the end of the fixed-rate period, borrowers will have a choice of either re-fixing the mortgage rate for another term at the then prevailing fixed rates offered by the HKMC, or converting the mortgage loan to a pre-committed floating rate of HKMC Prime Rate minus 3% per annum. The key product features are summarised in Annex A.
Mr Peter Pang, Executive Director of the HKMC and Deputy Chief Executive of the Hong Kong Monetary Authority, said, "Fixed rate mortgage products will bring about significant benefits to the home buyers in Hong Kong as it provides certainty in terms of monthly mortgage repayment amount and protects them from possible hikes in interest rate during the fixed-rate period. The fixed rate mortgages offer a good alternative for home buyers to consider when taking out a mortgage loan."
The application period is from October 27 to December 31, 2009. Loan drawdown has to be completed by February 28, 2010. Interested home buyers can contact the participating banks listed above.
Ends/Wednesday, October 21, 2009
Issued at HKT 20:31
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