Hang Seng Bank (0011) may need to offer a three- to six-month grace period for recently laid-off staff to transition out of its preferential Staff Plan, a mortgage expert said, amid concerns sparked by the lender’s job cuts.
Staff mortgage plans at banks typically offer higher loan-to-value ratios and lower interest rates, with some loans carrying rates as low as 1 percent and even up to 100 percent financing.
After losing access to such terms, affected employees seeking to refinance under standard plans would need to provide at least three months of income proof, said Eric Tso Tak-ming, chief vice president of mReferral Mortgage Brokerage Services. “It’s like passing probation before a bank will approve,” he added.
Hang Seng Bank said that it would fully support affected staff to help ease immediate financial pressure.
Under the Staff Plan, employees could access high loan-to-value mortgages without mortgage insurance. Tso said affected staff seeking to refinance would now likely need to apply for mortgage insurance, a process that could take up to 45 days, making it difficult to complete the transition without a three- to six-month grace period from the bank.
Refinancing also typically requires a new property valuation, and employees who bought at market peaks in recent years may face a shortfall that would require them to top up the difference in cash. If they are unable to secure new employment or alternative income sources, some may be forced to sell their properties at a discount.
STAFF REPORTER
