en-USzh-HKzh-CN
 
Monograph:Mortgages Contents
Appendix 2 Mortgage Insurance Programme : Eligibility and Premium
 
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)
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"

40 years (may be up to 60 years subject to approval)

 

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
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.
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.



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:

 
  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.

     
  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.

 

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:

 
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
 

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:

  a. The mortgagor has not defaulted in making any loan repayment instalment;
  b. No claim has been paid or is to be paid in respect of his mortgage; and
  c. The mortgage loan is fully repaid.
 
<<Back
LICENCE LIST

Ascertain if the person concerned is currently licensed and the details of the licence

Learn More
LICENSEE CORNER

Useful quick links for Licensees

Learn More
CANDIDATE CORNER

Useful information before becoming an estate agent

Learn More
CONSUMER EDUCATION WEBSITE

Useful information and advice for consumers

Learn More