HKMA tightens mortgages amid heating property market
(02-22 18:57)
Hong Kong Monetary Authority announced today that new measures are introduced -- effective immediately -- to strengthen the risk management of banks'mortgage lending business, and the ability of mortgage borrowers to cope with the potential impact of interest rate rises in future.
Lenders are required to increase the mortgage rate upward adjustment for stress testing property mortgage loan applicants’ debt servicing ability from at least 2 percentage points to at least 3 percentage points.
The applicable loan-to-value ratio limits are cut for non-residential property mortgage loans by 10 percentage points.
The LTV ratio and debt-servicing ratio for standalone car park space mortgage loans to cut the levels applicable to non-residential property mortgage loans, and the maximum loan tenor to 15 years.
After reviewing risks, the HKMA also considers it prudent to adopt a 15-percent risk-weight floor for all home mortgage loans granted by the banks after 22 February 2013.
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