Regulatory Alerts2011-06-10
Added · Updated
Summary of New Prudential Measures for Property Mortgage Loans
The regulator issued new prudential measures imposing stricter Loan-to-Value (LTV) ratios for property mortgage loans based on property type and borrower income sources. Owner-occupied residential loans now face maximum LTVs of 50% or 40% for high-value properties, while non-owner occupied and commercial loans are capped at 50% or 40% regardless of value. Net worth-based mortgage loans for residential properties are restricted to a 40% LTV, with specific loan caps applied to lower-value owner-occupied segments.
Annex 2 Summary of New Prudential Measures for Property Mortgage Loans Maximum LTV ratio Types of properties / Value of Borrowers whose mortgage loans properties Base case income is derived mainly from outside Hong Kong Measures applicable to owner occupied residential property mortgage loans only
HK$10 million 50% 40% HK$7but million (subject 60% to a maximum (subject 50% to a maximum Owner occupied < HK$10 million loan cap of HK$5 loan cap of HK $4 residential properties million) million) 70% 60% , (subject to a maximum (subject to a maximum < HK$7 million loan cap of HK$4.2 loan cap of HK$3.5 million) million) Measures applicable to residential and non-residential property mortgage loans Non-owner occupied | residential properties, and all commercial Regardless of 50% 40% and industrial value properties Net worth-based mortgage loans for | residential properties, Regardless of 40% Not applicable commercial and value industrial properties ! These include: owner occupied residential properties, non-owner occupied residential properties, and residential properties held by companies.