Hong Kong to relax mortgage arrangements for second-hand subsidised homes to support less well-off buyers
- Under revised rules that take effect in March next year, government will extend mortgage default guarantee period on a flat from 30 to 50 years
- Guarantee was originally put in place to encourage lenders to provide better terms for buyers of subsidised flats sold under home ownership schemes
Mortgage arrangements for second-hand subsidised homes in Hong Kong will be relaxed from March next year, after housing authorities approved a proposal to increase the circulation of flats and support low-to-middle income homebuyers.
The move, which extends the mortgage default guarantee period for the flat from 30 to 50 years, was proposed by Chief Executive John Lee Ka-chiu in his second policy address last month and endorsed by the Housing Authority on Friday.
“The extended mortgage guarantee and repayment period would be helpful to people who want to buy a home but with limited financial abilities,” said Cleresa Wong Pie-yue, chairwoman of the authority’s subsidised housing committee.
“But the market response is hard to predict because there are many factors affecting the homebuyers’ decision, including market sentiment, the economy, their income and repayment abilities, as well as the attractiveness of our housing project.”
During the mortgage guarantee period, the government will pay off the loan for residents unable to do so but the lender will then take ownership of the flat.
