Mortgage Insurance Programme
Make Home Ownership Easy
In March 1999, the Hong Kong Mortgage Corporation Limited (“HKMC”) launched the Mortgage Insurance Programme (“MIP”) with a view to promoting home ownership in Hong Kong.
According to the guideline issued by the Hong Kong Monetary Authority, banks have to comply with loan-to-value (“LTV”) requirement on owner-occupied residential mortgage lending. Yet, with the MIP providing mortgage insurance to banks, banks can provide mortgage loans with higher LTV ratio without incurring additional credit risk. As long as an application meets the relevant eligibility criteria (e.g. the maximum property value and the maximum loan amount, etc.), the bank can provide a mortgage loan of up to 80% LTV ratio under the MIP. In other words, homebuyers may only need to pay 20% of the property price for the down payment, which greatly reduces their down payment burden.
Under the MIP, banks are the mortgage loan providers. The mortgage insurance aims to protect the participating banks from losses, in general, on the portion of the loan over the 60% LTV threshold due to mortgage default by the borrowers. Therefore, in addition to helping the promotion of home ownership, the MIP also contributes to the maintenance of the banking stability.
Example of a 80% LTV loan under the MIP
Note: Banks are the beneficiary of the mortgage insurance policy.
The insurance cover shall take effect after the premium is received by the HKMC.
If required, homebuyers can choose to finance the premium on top of their mortgage loans.
Maximum LTV Ratio
The maximum LTV ratio of MIP was as follows:
|Property Value||Maximum LTV Ratio|
|At or below HK$4 million||80% or 90%*|
|Above HK$4 million and |
below HK$4.5 million
|80% - 90%*, |
subject to a cap of HK$3.6 million
(whichever is lower)
|At or above HK$4.5 million and |
up to HK$6 million
|80% or capped at HK$4.8 million |
(whichever is lower)
*Only applicable to application with (i) all mortgagors not holding any residential properties in Hong Kong at the time of application; (ii) all applicants being regular salaried persons; and (iii) maximum debt-to-income ratio of 45% (please refer to the requirement of maximum debt-to-income ratio as stated in the relevant Insurance Eligibility Criteria)
Eligibility Criteria for Owner-occupied Residential Properties (Last updated on 26 June 2017)
The Hong Kong Mortgage Corporation offers pre-approval services to the prospective homebuyers who can thus know their eligibility for the MIP before buying a property. Interested homebuyers can submit their applications and the required documents to the HKMC through the participating banks before signing the Provisional Sales and Purchase Agreement. A pre-approval result is usually available within 1 to 2 business days.
Terms & Conditions:
1. Under normal circumstances, the HKMC will inform the indicative approval result via participating banks within 1 to 2 business days after the HKMC has received all the required documents.
2. The HKMC reserves the right of final approval of all loan applications. For further details of the terms and requirements of the MIP, please contact any participating banks or call the MIP Hotline (2536 0136).
1. The availability of this pre-approval service is subject to business arrangement of any participating banks.
2. The validity of an approved pre-approval application lasts for 30 days from the date of approval.
Education and Promotion Activities
To help banks better introduce the Corporation’s products to their clients and to make the operation flow between banks and the Corporation smoother, different training courses are organised by the Corporation for the frontline bank staff from time to time. These can effectively help the frontline bank staff better understand the Corporation’s programmes, and update them with any new developments.
If you have any enquiry, please contact any participating bank or the HKMC for more information.
Programme Hotline : 2536 0136
Programme Enquiry : firstname.lastname@example.org