Regulatory Alerts1997-01-28
Added · Updated
Guideline 5.9.3: Criteria for Property Lending
The regulator issues Guideline 5.9.3 requiring authorized institutions to tighten property lending criteria in response to a sharp rise in residential mortgage growth and speculative activity. The document mandates a maximum loan-to-value ratio of 60% for luxury properties valued above HK$12 million, with a specific floor to prevent lending amount anomalies. These non-retrospective recommendations apply to new commitments and emphasize prudent debt service ratios to mitigate default risks associated with higher property valuations.
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