Mortgage Insurance Programme
Make Home Ownership Easy
The Mortgage Insurance Programme ("MIP") was launched by The Hong Kong Mortgage Corporation Limited ("HKMC") in March 1999 for promoting home ownership in Hong Kong. The MIP business has been transferred to and carried out by HKMC Insurance Limited ("HKMCI"), a wholly-owned subsidiary of the HKMC, with effect from 1 May 2018.
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 HKMCI.
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 1 May 2018)
Flat-for-Sale Scheme Secondary Market Scheme (SMS) of the Hong Kong Housing Society (HKHS)
The HKMCI provides MIP coverage for the Flat-for-Sale Scheme (FFSS) and Subsidised Sale Flats Project (SSFP) under the SMS of the HKHS.
The property’s appraised value of units under the SMS would be validated by the HKMCI based on the discounted value derived from the open market (i.e. transactions after settlement of land premium). To enable an early grasp of the property’s appraised value and approval conditions, interested homebuyers are strongly encouraged to use the pre-approval service offered by the HKMCI to assess the appraised property value of their target properties and their eligibility for the MIP, before signing the Provisional Agreement for Sale and Purchase.
Please contact your bank representatives for the list of required documents for the application of MIP under the SMS. Additional documents such as copy of “Certificate of Eligibility to Purchase” for the purchase of flats under the SMS will be required. You may also refer to the HKHS’s website (https://www.hkhs.com/en/application/subsidised-sale-housing) for details of the SMS.
HKMC Insurance Limited 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 HKMCI 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 HKMCI will inform the indicative approval result via participating banks within 1 to 2 business days after the HKMCI has received all the required documents.
2. The HKMCI 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 HKMCI’s products to their clients and to make the operation flow between banks and the HKMCI smoother, different training courses are organised by the HKMCI for the frontline bank staff from time to time. These can effectively help the frontline bank staff better understand the HKMCI’s programmes, and update them with any new developments.
If you have any enquiry, please contact any participating bank or the HKMCI for more information.
Programme Hotline : 2536 0136
Programme Enquiry : firstname.lastname@example.org