Regulatory Alerts2002-12-20
Added · Updated
The 70% Guideline on Residential Mortgage Lending
The Hong Kong Monetary Authority clarifies that the 70% guideline limits authorized institutions' risk exposure to 70% of a property's value rather than restricting borrowing amounts. Institutions must generally use the discounted price, accounting for cash rebates or developer discounts, to determine the true property value for this calculation. If an institution justifies using a value higher than the discounted price, it must properly document the reasons, which will be verified during onsite examinations.
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