Regulatory Alerts2009-10-23
Added · Updated
Prudential measures for residential mortgage loans
The Hong Kong Monetary Authority issued this circular to require authorized institutions to adopt conservative lending criteria amid rising luxury property prices. Specifically, banks must cap the maximum loan-to-value ratio at 60% for properties valued at HK$20 million or more, while capping the 70% ratio for lower-valued properties at a HK$12 million loan amount. Institutions are also mandated to prudently assess debt servicing ratios by modeling interest rate increases and maintain records for regulatory monitoring.
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