Disclaimer: This information is for reference only. The company makes no guarantees or representations as to its accuracy, completeness and/or suitability for any particular purpose. Please consult with a financial institution for actual mortgage eligibility, loan approval, and formal loan terms and conditions.
Our mortgage calculator (2021 edition) is a tool used to estimate the closing costs for the purchase of your home (e.g. down payment, stamp duty, fees), and to provide estimates on your monthly mortgage payments.
Mortgage Calculator Excel
According to the Government policy address on 16 Oct 2019, first-time property buyers can apply for a maximum 90% and 80% mortgage for those properties priced below $8 and $10 million, respectively. For example, if you are a new buyer and would like to buy a $7 million property, the previous down payment would have been approximately $2.8 million, but now you need only pay $700K.
*Assumes 2.625% annual interest rate
Stress tests are waived for first-time buyers when completing a mortgage application.
Current mortgage guidelines allow banks to provide consumers with mortgages up to 80% (and up to 90% LTV in certain instances) for properties up to $10 million. However, any time a bank underwrites a mortgage it assumes credit risk and these risks increase the larger the LTV.
The MIP, launched by The Hong Kong Mortgage Corporation Limited (HKMC), provides mortgage insurance to banks to mitigate some of this credit risk. Whenever a consumer acquires a mortgage from a bank, the consumer must purchase mortgage insurance on the mortgage in excess of 60% LTV. This insurance protects the bank from consumer default risk on the portion of the bank mortgage exceeding 60%. As a guideline, premiums generally range from 1.515% to 4.35%*.
The net effect of MIP is that banks can issue mortgages with a higher LTV to promote home ownership in Hong Kong, MIP lowers banks’ credit risk, and the MIP provides a layer of added stability to the Hong Kong banking system.
* Data as of January 1, 2021.
If you wish to take out mortgage loans for homes that exceed existing value caps, you will be charged an additional 15%. Moreover, under the new regulations, those who fail the stress test for MIP loans up to 80% or 90% of an LTV ratio, will face additional premiums based on relevant risk factors. Like other types of insurance, mortgage insurance premiums need to be paid on time. in one lump sum or in instalments depending on your policy. In many cases, you will enjoy a premium discount from most mortgage insurance providers.
*Mortgage Insurance premium rate sheet from HKMC
According to the HKMA, up to 95% of property buyers generally sign onto two general floating-rate mortgage plans: The H mortgage (interbank mortgage), and P mortgage (prime rate mortgage). About 90% of applicants opt for the H button, primarily as its actual interest rate is usually lower than that of the P button. But if a bank is caught in an interest rate hike cycle, the P press interest rate will be more advantageous. So, before you select a mortgage plan, it is important to have a full understanding about the calculation methods associated with each mortgage interest rate and make sure you have a full grasp of the actual market environment before you make a final decision.
When you purchase a property in Hong Kong, stamp duty to the government is required for both the buyer and seller (under certain conditions). These stamp duties include SSD, AVD, BSD and others.
Effective since 20 Nov. 2010, an SSD will be levied on any residential property, either owned by an individual or company and resold within 24 months (if the property was acquired on or after 20 November 2010, and before 27 October 2012) or within 36 months (if the property was acquired on or after 27 October 2012).
The Stamp Duty (Amendment) Ordinance 2018 (herein referred to as ‘2018 Amendment Ordinance’) was gazetted on 19 January 2018. Under the terms of this ordinance, the AVDs at Scale 1 are divided into Part 1 (a flat rate of 15%) and Part 2 (original Scale 1 rates under the 2014 (No. 2) Amendment Ordinance) with effect from 5 November 2016. Part 1 of scale 1 applies to instruments related to residential properties, and Part 2 relates to Scale 1 applicable to instruments of non-residential properties. The 2018 Amendment Ordinance provides that any instruments of a residential property executed on or after 5 November 2016 for the sale and purchase or transfer of that residential property, unless specifically exempted or otherwise provided for, will be subject to an AVD at the rate listed under Part 1 of Scale 1,(i.e. a flat rate of 15% of the consideration or value of the residential property), whichever is higher. For HKPRs who change their residential properties and wish to claim a partial refund of the AVD paid on the acquisition of a new property, the 2018 Amendment Ordinance also extends the time limit for the disposal of the original property from within 6 months to within 12 months after the date of conveyance of the new property if the new property had been acquired on or after 5 November 2016.
The Stamp Duty (Amendment) (No. 2) Ordinance 2018 (2018 (No. 2) (Amendment Ordinance) was gazetted on 20 April 2018 and states that unless specifically exempted or otherwise provided for in the law, the acquisition of more than one residential property under a single instrument executed on or after 12 April 2017 will be subject to an AVD at the rate listed under Part 1 of Scale 1 – (a flat rate of 15%), even if the purchaser/transferee is a HKPR who is acting on his/her own behalf and does not own any other residential property in Hong Kong at the time of the acquisition.
If a non-Hong Kong permanent resident or company purchases property in Hong Kong, an extra 15% stamp duty, called a BSD, will be levied.
The application step is a key process of when deciding to purchase your flat. The transaction success is entirely determined by the bank's review results. However, you can help speed up the bank approval process, by strictly following all procedures for application submission.
Before you submit your mortgage application, you must first complete application documents, which include:
Carefully review various mortgage plans, interest rates and discounts on offer from banks in Hong Kong, then choose and submit a mortgage application to the bank that best suits your needs. In addition to your target bank we recommend that you apply to two to three other banks to prevent unexpected outcomes. If you hired a law firm to help with your sales contract, make certain that the firm has been approved by the bank.
In order to assess your eligibility, a bank will consider the mortgage interest rate, tenor and loan amount based on: (a) the value of the property (b) the age of the building and (c) the applicant’s financial profile (salary, credit history, assets, etc.). The approval process can as anywhere from a few days to two months, so make sure you budget sufficient time when you apply. Following approval of the mortgage, the bank will sign a contract you, and send a letter to your law firm to handle the processing of all relevant documents.
The mortgage deed and all other documents required by the bank must be signed prior to the actual transaction date. When signing various documents, make sure to use a consistent signature format in order to avoid re-signing by the bank or law firm.
Once the bank approves your mortgage loan, arrangements will be made for you to withdraw it from the bank. Home buyers will then have to start making contributions within the contracted period based on all relevant stipulations.
*Please note that cash rebates are generally credited within one month after a loan has been drawn.