Money

HK revises Mortgage Insurance Program

(Xinhua)
Updated: 2011-06-11 11:35

HONG KONG -- The Hong Kong Mortgage Corporation Limited (HKMC) announced Friday that it will lower the cap on the value of property that can be covered under the Mortgage Insurance Program (MIP) from HK$6.8 million ($873,81) to HK$6 million.

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As a result, for mortgage loans with MIP cover starting from 70 percent loan-to-value (LTV) threshold, the maximum loan amount will be reduced from HK$6.12 million to HK$5.4 million.

Meanwhile, for mortgage loans with MIP cover starting from 60 percent LTV threshold, the maximum loan amount will be reduced from HK$6 million to HK$5 million. Also, the MIP will not be available to applicants whose principal income is not derived from Hong Kong.

The above changes are made to take account of the prudential measures for residential mortgage loans announced Friday by the Hong Kong Monetary Authority.

These changes will apply to MIP applications with provisional sale and purchase agreement signed on or after June 11, 2011. For homebuyers who have executed the provisional sale and purchase agreement on or before June 10, 2011, their mortgage loan applications may be submitted by the MIP participating banks for processing in accordance with the existing scope and criteria of the MIP.