Regulator announces changes for Hong Kong's mortgage insurance program

HKMC Insurance Limited (HKMCI) has made an announcement regarding modifications to the Mortgage Insurance Program (MIP) applicable to residential properties under construction.

According to a news release, these amendments align the eligibility criteria with those applicable to completed residential properties. Following these changes:

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

These adjusted eligibility criteria will be applicable to mortgage loans for properties under construction meant for self-occupation, with provisional agreements for sale and purchase executed on or after Sept. 22.

Previously, the MIP only provided mortgage insurance for properties under construction with a property value up to HK$6 million. These amendments were carefully considered by HKMCI, taking into account property market conditions and their own business and risk factors. The objective is to enhance the MIP's role in promoting home ownership.

Elsewhere in the city-state, the Insurance Authority (IA) of Hong Kong recently sent out a notice regarding a fraudulent social media account parading itself as the official platform of an authorized insurer.

What are your thoughts on this story? Please feel free to share your comments below.