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Most of the banks do not have their own valuation department. They usually use the valuation service by a third party company like DTZ, CBRE, Savills, Centaline Property Agency and Lei Shing Hong Limited, etc. to provide valuation services. HSBC only accepts valuation service from Debenham Thouard Zadelhoff (DTZ), therefore their valuation tends to be reserved.
Online Valuation Service doesn’t cover all properties in Hong Kong and the valuation tends to be more reserved. MoneySmart suggests considering valuation from a number of banks or using MoneySmart Property Valuation Calculator.
Property valuation is an important part of the entire mortgage application process. It does not only affect new purchase but also refinance mortgage. Numerous specific factors relating to the building will be looked at for example house prices of recent sales in the area, sales transactions, age, quality, unauthorised building works and building orders (if any). Village houses, old buildings and single private residential buildings usually have a low number of sales transactions, resulting in a low mortgage valuation.
For properties with a lower than expected valuation, MoneySmart suggests:
|HSBC MORTGAGE PLANS||MORTGAGE LOAN SIZE & MORTGAGE RATE||Right Column Header|
|New Purchase P Plan||HK$1,000,000 or above & P-2.5%= 2.5%||1%|
|Refinance P Plan||HK$1,000,000 or above & P-2.5%= 2.5%||0%|
|HSBC MORTGAGE PLAN||MORTGAGE RATE & CAPPED MORTGAGE RATE||Right Column Header|
|H Plan New Purchase||H+1.24 & P(5%) - 2.5% = 2.5%||1%|
|H Plan Refinance||H+1.24 & P(5%) - 2.5% = 2.5%||0%|
Some applicants may prefer a fixed-rate mortgage to avoid the fluctuation of H Plan or P Plan. Although the interest rate of the fixed-rate mortgage remains unchanged for three years, it is usually higher than P Plan or H Plan. Therefore, it is less popular.
|New purchase of public housing without premium payment (green form applicants)||Y||-|
|New purchase or refinance of HOS flats without premium payment||Maybe||Letter from Housing Authority required.|
|New purchase of HOS flats without premium payment (white form applicants)||Y||-|
|Refinance of HOS flats without premium payment||Maybe||Letter from Housing Authority required.|
|Village house||Maybe||House viewing required. Right of way requires verification.|
|Property with building orders||N||-|
Yes. But not all rental income will be counted as monthly regular income. Please see below for details:
Percentage of rental income calculated as monthly regular income
For example: If the monthly income of the applicant is HK$20,000 and his/ her monthly rental income (lease with stamping provided). His monthly income will be HK$20,000 + HK$10,000 X 70%, which is HK$27,000.
There are two types of early mortgage repayment. The first one is to pay off the debt completely and the property will become yours. The second one is to pay back the capital to save on some interests. No matter which one you choose, you may be subject to early mortgage repayment fees. In recent years, some banks have shortened the penalty period to half a year or a year. If a borrower decides to repay the debt within the penalty period, a higher early mortgage repayment fees/ interest rates will be incurred. If it is beyond the penalty period, the fees will be a lot less. In the first year of the penalty period, the penalty is 1%+cash rebate and in the second year, the penalty is all cash rebate. MoneySmart suggests negotiating the best penalty period terms before accepting the mortgage plan.
Applicants can contact our professional mortgage team though our website WhatsApp +852 9665 5218
To apply for HSBC mortgage, proof of identity, provisional agreement for sale and purchase (applicable to new purchase)/ recent 3-month repayment record, current mortgage repayment information, proof of residential address (applicable to refinance), recent 3-month salary record, bank statement and recent tax bill are required.
When a property is found to have unauthorized building works by the Housing Department, a building order will be issued, which demands the property owner to get it removed in a given time frame. HSBC will not provide mortgages for properties with building order.
In general, self-employed applicants are required to provide 6-month of bank statement as income proof. Applicants can also apply through Asset Based Lending using properties, cash, stocks, bonds, etc but not a certain percentage of the total assets will be calculated.
HSBC does not accept mortgage application without a tax bill. Applicants can consider applying through Asset Based Lending (ABL) if he/ she has more assets.
If worried about increasing interest rate or increasing capped interest rate, a property owner may consider applying for a pre-approved mortgage but many banks including HSBC does not accept pre-approved mortgage.