Regulatory Alerts2012-09-14
Added · Updated
Prudential Measures for Property Mortgage Loans
The Hong Kong Monetary Authority issued new macroprudential measures to mitigate systemic risks arising from a heating property market and rising loan tenors. The regulations impose stricter limits on borrowers with multiple mortgages, including a reduced debt servicing ratio cap of 40%, a 30% loan-to-value limit for net-worth-based assessments, and a 10 percentage point LTV reduction for applicants with income derived mainly from outside Hong Kong. Additionally, the maximum loan tenor for all property mortgage loans is capped at 30 years to enhance borrower resilience against interest rate fluctuations.