Hong Kong imposes changes to mortgage insurance plan

Previously, mortgage insurance was only for properties under construction with a property value of up to HK$6m.

The Hong Kong Mortgage Corporation’s wholly-owned subsidiary, HKMC Insurance Limited (HKMCI), announced changes to the Mortgage Insurance Programme (MIP) for residential properties under construction. 

These changes align the eligibility criteria with those for completed residential properties. 

The amendments, effective from 22 September are as follows:

• For eligible properties under construction with a property value of up to HK$10m, the maximum loan-to-value (LTV) ratio is 90%.
• For eligible properties under construction with a property value above HK$10m and up to HK$15m, the maximum LTV ratio is 80%, or an LTV ratio derived from a mortgage loan cap of HK$9m, whichever is higher.
• For eligible properties under construction with a property value above HK$15m and up to HK$30m, the maximum LTV ratio is 70%, or an LTV ratio derived from a mortgage loan cap of HK$12m, whichever is higher.

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Previously, the MIP only provided mortgage insurance for properties under construction with a property value of up to HK$6m. 

These amendments reflect considerations of property market conditions, business factors, and risk factors, aiming to facilitate greater home ownership through the MIP.