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Monograph : Mortgages |
Contents |
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| (3) Mortgage
for Different Types of Properties |
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| Generally, banks in Hong Kong
may grant mortgage loan up to 70% of the value of the property
mortgaged. However, purchasers should note that different banks
have different policies and considerations and may adopt a different
loan-to-value ratio for different types of properties. A purchaser
should therefore check with his bank on the mortgage plans available
in respect of the property he intends to purchase before entering
into any agreement. |
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1. |
Residential property |
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For most residential properties, banks may grant
mortgage loans up to 70% of the value of the properties.
Under the Mortgage Insurance Programme, a bank may lend
up to 95% of the value of the property if the relevant
eligibility criteria of the programme are met.
The bank will usually set a limit, say 40 or 50 years,
for the maximum sum of "the remaining term to maturity"
and "the age of property" throughout the life
of the mortgage loan. Therefore, if the bank sets such
a limit at 40 years, it will only grant a loan with
a repayment tenor of 15 years if the property to be
secured is already 25 years old.
Small village houses in the New Territories are often
regarded as a special category and may be looked at
with caution by banks. The bank may apply a lower loan-to-value
ratio to such properties, or require a higher interest
rate or shorter repayment tenor. Prospective purchasers
of small village houses should therefore pay special
attention to this fact. Furthermore, small village houses
are not eligible for the Mortgage Insurance Programme. |
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2. |
Carpark |
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If a mortgagor offers a carpark together with a residential
property as security to a bank, the bank will normally
be prepared to grant a mortgage loan of up to 70% of the
total value of the carpark and the residential property.
If a carpark alone is offered as security, the bank will
generally consider the loan application with greater caution. |
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3. |
Non-residential property |
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Many banks are likely to be more cautious about granting
mortgage loans for shops, factory workshops, offices
and other commercial premises in view of the greater
fluctuation in commercial property prices. However,
there are cases in which a bank will grant loans of
up to 70% of the value of commercial premises.
Although the bank will set limits for the sum of "the
remaining term to maturity" and "the age of
property", such limits will usually be more stringent
than those applied to mortgages on residential properties.
However, the bank will also take into consideration
other factors such as the financial strength of the
borrower and his relationship with the bank in determining
the tenor of the mortgage loan to be granted. |
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