Mortgage Glossary

If you start the process of buying property with the help of a real estate agent, you may be charged an agency commission by the agent for their service.

 

 

 

The regular payment on a home loan, which includes payment for the principal loan amount and the interest.

 

 

 

Also called repayment period, the time it takes to completely pay off the loan, including the loan’s principal and interest.

 

 

 

Some banks in Hong Kong offer cash rebates to customers who successfully complete the purchase of the property. You may be able to find a bank that offers a 1% cash rebate if you take out a home loan.

 

 

Prime rate/P rate

Prime rate (P rate) is usually used to symbolized the rate and nature of prime rate based mortgage plan is a floating rate, which means it can be changed at any time. This rate is set by the banks individually. There are two types of prime rate in the market, the high prime rate and low prime rate. As of now, high prime rate is at 5.25%, this rate is usually used by small to medium sized banks. While bigger banks uses low prime rate of 5.0% normally.

 

HIBOR/H rate

HIBOR (H rate) is known as Hong Kong Interbank Offered Rate, HIBOR is normally used as the interest rate offered between lending of banks. HIBOR-linked mortgage plan adopts the HIBOR rate as a base and formulate the mortgage rate. The characteristic of HIBOR is influenced by the money market movement, which means it fluctuates on a daily basis. HIBOR-based mortgage rate is the sum of HIBOR and the rate that a bank offers you. For instances, the current HIBOR is H+0.2%, and the bank rate is 2.4%, therefore your mortgage rate will be 2.6%. Bear in mind that HIBOR fluctuates on a daily basis, you may end up paying higher interest when HIBOR goes up.