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Monograph : Mortgages |
Contents |
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| Appendix 2 Mortgage
Insurance Programme : Eligibility and Premium |
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| Eligibility
Guide (for reference only, contact HKMC or participating
banks for full details) |
| Maximum Loan Size
|
HK$5,000,000 or less |
Over HK$5,000,000 and up to HK$12,000,000 |
Maximum
Loan-To-Value Ratio ("LTV") |
95%
(may exceed 95% if premium is financed with mortgage loan)
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90% (for loan exceeding HK$8,000,000)
95% (for loan not exceeding HK$8,000,000)
(may exceed the relevant percentage if premium is financed
with the mortgage loan) |
| Maximum Debt-To-Income Ratio ("DTI") (see note 1) |
50% (45% if LTV > 90% and loan tenor > 25 years) |
50% (45% if LTV > 90% and loan tenor > 25 years) |
| Maximum Loan Tenor |
30 years |
30 years |
| Minimum Loan Tenor |
10 years |
10 years |
| Maximum Sum of "Original/ Remaining
Term To Maturity" and "Age of Property"
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40 years (may be up to 60 years subject to approval)
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40 years (may be up to 60 years subject to approval) |
| Employment Type |
Self-employed persons are not eligible except for professionals
such as doctors, certified public accountants, lawyers,
or other professional categories acceptable to HKMC |
Non-regular salaried employed persons and self-employed
persons are not eligible except for professionals such
as doctors, certified public accountants, lawyers or other
professional categories acceptable to HKMC |
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Owner Occupancy |
At least one of the income-generating mortgagor(s)/ borrower(s) must occupy the property as his/her primary residence.
The occupying borrower/ mortgagor's income must not be less than the monthly mortgage instalment payment and his/her other monthly debt obligations. |
At least one of the income-generating mortgagor(s)/ borrower(s) must occupy the property as his/her primary residence.
The occupying borrower/ mortgagor's income must not be less than the monthly mortgage instalment payment and his/her other monthly debt obligations. |
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PROPERTY TYPE |
Residential (excluding 'Ting', 'Tso', 'Tong' properties or small village houses in New Territories)
For property under construction (a) the development must be covered by the consent scheme and scheduled for completion within 12 months from drawdown date, and (b) the property must not be purchased from a confirmor in a sub-sale and purchase transaction. Further, the homebuyer must have paid all stamp duty before drawdown. |
Residential (excluding 'Ting', 'Tso', 'Tong' properties or small village houses in New Territories)
For property under construction (a) the development must be covered by the consent scheme and scheduled for completion within 12 months from drawdown date, and (b) the property must not be purchased from a confirmor in a sub-sale and purchase transaction. Further, the homebuyer must have paid all stamp duty before drawdown. |
(1)
For residential properties under construction, all the borrower's debt obligations and any rental payments payable by the borrower during the construction period must be taken into account when calculating DTI.
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Premium
payment options
Under the Mortgage Insurance Programme, the insured party
is the mortgagee bank in principle. However, in practice,
the insurance premium is usually borne by the mortgagor. The
mortgagor can choose to pay the insurance premium in one of
the following ways: |
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a. |
Loan and subsidy amounts
The premium is paid to HKMC in one lump sum when the
relevant mortgage loan is drawn down. The mortgagor
can either pay such a lump sum from his own means or
ask the bank to finance his payment, in which case,
the premium will be added to the mortgage loan as part
of its principal and will be repaid in the same manner
and on the same terms as the mortgage loan. |
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b. |
Annual premium payment
The first premium payment is paid to HKMC when the
mortgage loan is drawn down. The rest of the premium
is paid by way of annual payments until the insurance
expires or terminates when the relevant mortgage loan
is fully repaid or when the outstanding balance of the
mortgage loan reaches 70% or below of the value of the
mortgaged property at loan drawdown. |
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Premium
rate
The amount of premium payable under the Mortgage Insurance
Programme varies according to the relevant loan-to-value ratio,
loan tenor and payment method to reflect the credit risk of
the relevant mortgage loan. The rate of such premium for floating
rate mortgages can be seen from the following table: |
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| Loan-To-Value
Ratio |
Loan
Tenor
(Years) |
Single
Premium Payment
(% of the Original Principal Balance) |
Annual Premium
Payment |
First Year
(% of the Original Principal Balance)
|
Renewal
(% of the Original Principal Balance) |
Above 70% and up to 80% |
10
15
20
25
30 |
1.00
1.15
1.40
1.50
1.65 |
0.50
0.60
0.70
0.75
0.85 |
0.24
0.24
0.24
0.24
0.24 |
| Above 80% and up to 85% |
10
15
20
25
30 |
1.55
1.80
2.15
2.30
2.40 |
0.70
0.80
0.90
1.00
1.10 |
0.45
0.45
0.45
0.45
0.45 |
| Above 85% and up to 90% |
10
15
20
25
30 |
2.15
2.50
2.98
3.35
3.55 |
0.90
1.09
1.28
1.46
1.65 |
0.63
0.63
0.63
0.63
0.63 |
| Above 90% and up to 95% |
10
15
20
25
30 |
2.48
2.88
3.38
3.78
3.98 |
1.04
1.26
1.48
1.68
1.90 |
0.73
0.73
0.73
0.73
0.73 |
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Refund
of premium
Where the loan-to-value ratio does not exceed 90% and the
mortgagor has made a single premium payment, the mortgagor
may obtain a refund of part of the premium if he sells his
property or would like to repay his mortgage loan during the
first three years of the insured period provided that:
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a. |
The mortgagor has not defaulted in making
any loan repayment instalment; |
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b. |
No claim has been paid or is to be paid
in respect of his mortgage; and |
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c. |
The mortgage loan is fully repaid. |
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