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Hong Kong property
BusinessBanking & Finance

Hong Kong relaxes mortgage rules for the first time since 2009 to make homes more affordable for first-time buyers and upgrades

  • Two weeks ago, Financial Secretary Paul Chan Mo-po told the city’s legislature that the government would consider “marginally relaxing” the loan-to-value ratio
  • Homes of up to HK$15 million for the owners’ own use can get up to 70 per cent mortgage financing

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Housing Authority (HA) distributes application forms for the latest sale of Home Ownership Scheme flats at the HA customer service centre in Lok Fu on 30 March 2017. Photo: Nora Tam
Enoch Yiu,Peggy SitoandCheryl Arcibal

Hong Kong has eased mortgage rules for some homes to make them more affordable for first-time homebuyers and to make it easier for owners to trade up, relaxing the city’s property curbs for the first time since 2009 to kick-start a slumping market.

Effectively immediately, the 50 per cent loans eligibility for homes that cost more than HK$10 million (US$1.3 million) has been refined into three tiers: homes of up to HK$15 million for owners’ own use can get up to 70 per cent mortgage financing, while those valued between HK$15 million and HK$30 million are entitled to 60 per cent loans, according to the Hong Kong Monetary Authority (HKMA) and the Hong Kong Mortgage Corporation (HKMC).

Overseas investors, defined as those deriving their incomes outside the city, also received an incentive. They will be eligible for up to 50 to 70 per cent mortgage loan financing like local buyers after the HKMA scrapped a rule that banks will offer them a mortgage loan-to-value ratio at 10 percentage points below that offered to local buyers.

“We have no intention to encourage overseas buyers in the market, but the policy is changed as we found it is no longer needed based on the market situation,” Arthur Yuen Kwok-hang, the HKMA’s deputy CEO, said at a media briefing.

Hong Kong Monetary Authority (HKMA) Chief Executive Eddie Yue Wai-man, speaking during the HKMA-BIS Joint Conference in Tsim Sha Tsui on 24 March 2023. Photo: Jonathan Wong
Hong Kong Monetary Authority (HKMA) Chief Executive Eddie Yue Wai-man, speaking during the HKMA-BIS Joint Conference in Tsim Sha Tsui on 24 March 2023. Photo: Jonathan Wong

The plan comes two weeks after Hong Kong’s Financial Secretary, Paul Chan Mo-po, told the local legislature that the government would consider “marginally relaxing” the loan-to-value ratio, to strike a “balance [between] financial stability and the interest of first-time homebuyers”.

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