Best Mortgage Plan in Hong Kong 2020

Compare mortgage interest rates in Hong Kong and find the best mortgage plan for you. Read More
Looking for 4,000,000 loan over 30 Years
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What is a mortgage?

A mortgage is a loan taken out for house buying. If mortgage borrowers can't keep up the repayments, the lender can repossess the property and sell it. It is important for mortgage borrowers to review different mortgage offers and choose the one that suits his or her own financial situation. If you are like most people, you are probably too time deprived to do it yourself. Why not try MoneySmart free valuation and application service? It provides you with an array of plans to choose from and you will know the application result in just 9 working days. What's more, you can get up to 1.5% rebate!

CheckValuation of Any Property in Hong Kong

Use this free property valuation calculator to calculate valuation of your property.

Why Get a Mortgage through MoneySmart?

Best Mortgage Offers

Get SPECIAL interest rate offer from 2.5% and cash rebate up to 1.5%.

Speed Up the Mortgage Application

Get multiple banks’ offers in 9 working days by filling our Fast Form at the comfort of your home.

Exclusive Extra Bonus

Apply for a mortgage through MoneySmart to get an exclusive Extra Cash Rebate! As long as you apply for a mortgage with MoneySmart from 1 August 2020 to 31 October 2020, and withdraw the designated amount of mortgage loan before 31 December 2020, you can earn up to 0.26% Extra Cash Rebate from MoneySmart.

There is no limit for MoneySmart Extra Cash Rebate and will be direct debited into you account after 1 month of Mortgage Drawdown Date.

Please click here for Terms & Conditions of MoneySmart Exclusive Mortgage Offer.

H/P Plan

H plan depends on the capital balance in the banking and P Plan depends on the interest rate changes by the Federal Reserve. H Plan reflects the borrowing costs, so it has more fluctuations. It can increase and decrease in a short period of time. A few years ago, the capital balance in the banking was sufficient and the HIBOR was low, so many applicants prefer H Plan. HIBOR was always low although the capped mortgage rates were higher than the interest rate of P Plan. So it was worthwhile to adopt H Plan instead of P Plan back then. However, HIBOR has increased a lot in recent years and many are using the capped mortgage rate to repay their monthly mortgage. So mortgage borrower can consider choosing P plan.

Compare Mortgage Loan Rates - P Plan

Hang Seng2.375%
Standard Chartered2.375%
Bank of China2.375%
Bank of East Asia2.375-2.475%

Compare Mortgage Loan Rates - HIBOR

Hang SengH+1.24
Standard CharteredH+1.24
Bank of ChinaH+1.235-H+1.245
Bank of East AsiaH+1.24

Mortgage Terminology

Loan-to-Value (LTV) ratio

LTV ratio is calculated by dividing the loan amount by the appraised value of the property. For example, if you have taken out a loan of HK$6,000,000 for a property that worth HK$8,000,000. The LTV is 75%. The latest Policy Address has relaxed the mortgage policy in Hong Kong, allowing buyers to take out a bigger loan. Borrowers can take out a mortgage up to 90% a loan-to-value ratio for properties worth as much as HK$8,000,000 previously capped at HK$4,000,000. Moreover, prospective home buyers can get an LTV of 80% on properties worth up to HK$10 million, previously capped at HK$6,000,000.

The Mortgage Insurance Programme ('MIP')

Launched by The Hong Kong Mortgage Corporation Limited ('HKMC'), Mortgage Insurance Programme ('MIP') provides mortgage insurance to banks to offer mortgage loans with higher LTV ratio without bearing additional credit risk. The premium can be paid in one go or in instalment calculated into the mortgage. Only first-time buyers can take out a mortgage up to 90% a loan-to-value ratio for properties under HK$10,000,000.

Stress Test

According to HKMC, prospective homebuyers are required to pass the stress test in order to secure a mortgage offer. The monthly repayment amount should be within 60% of homebuyer’s monthly income after adding 3% interest rate to the existing one.

Loan Guarantor

If you can't pass the stress test, you are not able to get an application offer. To pass the test, you need a loan guarantor, which is your next of kin. For example, if your monthly income is HK$20,000 and you would like to take out a loan of 80% LTV, your monthly repayment amount is HK$15,000. You cannot pass the stress test unless you have HK30,000 income. Therefore, you need a guarantor with monthly income say HK$15,000 to get a mortgage.

Property types and mortgage

Property types and mortgageBanks
Village HouseHSBC/Bank of China/Bank of East Asia/Standard Chartered
HOS flatsHSBC/Bank of East Asia/Standard Chartered
Public housingHSBC/Bank of East Asia/Standard Chartered
New propertiesHSBC/Bank of China/Bank of East Asia/Standard Chartered
Old propertiesHSBC/Bank of China/Bank of East Asia/Standard Chartered
Commercial buildings/ industrial buildingsHSBC/Bank of China/Bank of East Asia/Standard Chartered
Parking lotsHSBC/Bank of China/Bank of East Asia/Standard Chartered

Frequently Asked Questions

What is Penalty Period/ Tie-in Period?

The amount of time (usually 2-3 years) that mortgage borrowers are required to stay with the same lender without having to pay an Early Repayment Charge either to pay off your mortgage or switch to another lender. The charge is usually calculated by a certain percentage of the outstanding mortgage loan. The longer you stay, the less you are required to pay.

If I buy another property within the tie-in period, will i still be penalised?

If you take out the loan for your new home purchase with the same bank, you may be able to claim the penalty charge back. Also, the rebate you enjoy for your new purchase can also offset part of the penalty charge.

Will I also be penalised for repaying part of the mortgage debt earlier than agreed?

Yes. If mortgage borrowers decide to repay the mortgage debt earlier, either in full or in part, he or she will also be penalised.

What is the maximum loan-to-value ratio for a mortgage?

Under the regulations of Hong Kong government and HKMA, the ceiling of a mortgage is based on the value of the property, ranging from 90% to 50%. The value of first-hand property is set by developers; and the second-hand is set by valuations. You’ll need to apply for different mortgage plans based on your financial status. You may also need a guarantor to apply for a mortgage.

Will banks check my credit score report upon my mortgage application?

Banks will check your credit record and credit score. After examining your credit cards and other loans, they will decide your loan amount and interest rate etc.

What is floating interest rate mortgage (H plan/P plan)?

“P plan” means the mortgage plans that are based on Prime rate, depending on different banks. “H plan” means the plans that are based on the Hong Kong Interbank Offered Rate (HIBOR). It’s an adjusted interest rate of the bank system, and usually measures on a monthly basis. Both of the rates will change over time, which means that the interest rate of your mortgage plan will never be fixed.

What is mortgage insurance?

If your property is valued under 6 million and its loan-to-value ratio is over 60%, you’ll need to apply to “mortgage insurance companies” for your mortgage insurance.

What is first and second mortgage from property developers?

These mortgage loans offered by the major real estate developers and its financial companies aren’t under the regulations of HKMA. That’s why they can give you a more relaxed ratio, but they may double the banks’ interest rates.

What is transfer of mortgage/further charge?

Through the evaluation of banks, property owners can make another mortgage loan so as to pick a better plan or cash in as liquidity to make a new investment.

What are the offers and service provided by banks other than mortgage plans?

Cash rebates: These mortgage loans offered by the major real estate developers and its financial companies aren’t under the regulations of HKMA. That’s why they can give you a more relaxed ratio, but they may double the banks’ interest rates. Mortgage Link: Deposit-linked mortgage account Some H plan customers can make a certain amount of deposit into their bank-provided “Mortgage Link” accounts. After making the deposit, the customers can earn an interest rate that is the same as their mortgage plans charging. This offsets their interest expenses or their increased contributions after an interest hike.

Do I need to pay MoneySmart for mortgage consultation service? How does MoneySmart generate its income?

MoneySmart is an online financial product aggregator, meaning we do not charge any fees to our customers, and we offer different promotions and offers. If you apply for a mortgage successfully through MoneySmart, we will get commissions from the bank.

MoneySmart Exclusive Mortgage Offer - Terms & Conditions

  1. Promotion period is between 1 August 2020 and 31 October 2020 (both dates inclusive).
  2. Mortgage applications must be successfully made between 1 August 2020 and 31 October 2020 (both dates inclusive) and the loan must be taken on or before 31 December 2020.
  3. The applicant is eligible for MoneySmart extra if a mortgage application is successfully made and it is taken out before the promotion ends.
  4. Upon successful verification, MoneySmart Extra Cash Rebate will be direct debited into your provided bank account.
  5. There is no upbound limit for MoneySmart Extra Cash Rebate.
  6. MoneySmart reserves the right of final decision when a dispute arises.
  7. For enquiries, please email to MoneySmart.
  8. Client understands and accepts that Extra Cash Rebates are provided by MoneySmart. No banks are liable for the additional Cash Rebate.