Regulatory Alerts2011-06-10
Added · Updated
Prudential Measures for Property Mortgage Loans
The Hong Kong Monetary Authority issued these measures to mitigate rising risks to banking system stability caused by soaring property prices and low interest rates. The guidelines impose strict Loan-to-Value caps on owner-occupied residential mortgages based on property value and require a 10 percentage point LTV reduction for borrowers with income derived mainly from outside Hong Kong. Additionally, the maximum LTV for net worth-based loans is lowered to 40%, and institutions are advised to apply more stringent underwriting standards for borrowers with multiple mortgages.
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