The maximum mortgage ratio was raised to 70% Central Plains Mortgage: It can attract potential buyers from all sides to enter the market

The Zhitong Finance App learned that on October 16, the Chief Executive of Hong Kong, Mr. Li Jiachao, announced the “2024 Policy Address”. Among them, the maximum mortgage ratio limit for all properties was completely relaxed to 70%, and the upper limit of the contributions' income ratio was adjusted to 50%. Wang Meifeng, managing director of Central Plains Mortgage, said that the Hong Kong Monetary Authority is welcome to fully relax all mortgage ratios to 70%. It is estimated that it will attract potential buyers from all sides to enter the market, and the property market is more motivated and diversified to develop.

Wong Mei Fung said that the continued increase in rents this year has brought the current return on rent to an average of 3.5%, and the return on rent for some property units has reached 4% or more. Coupled with Hong Kong entering an interest rate reduction cycle and increasing the chances of Hong Kong property prices bottoming out and stabilizing, the current mortgage ratio relaxation has raised the mortgage ratio of property buyers to 70%.

In addition, for those who already own their own property to rent, they originally needed to reduce the mortgage ratio by 10%, and the mortgage ratio was only 50% based on two-home mortgages. Currently, the two-home mortgage ratio can also be as high as 70%, and the contribution income ratio has also been raised from 40% to 50%. Both initial installment and income requirements have been reduced, which is expected to attract more potential buyers to enter the market.

Wang Mei Feng warned that the “contribution” of the contribution as a share of income includes the borrower's total monthly debt payment amount, not just the new shopping business contribution. Assuming that the borrower already has mortgage payments for personal use, if they buy more than one floor to apply for a mortgage, they need to calculate the total amount of the two property mortgage payments together with other debt contributions (if any). The total payment amount accounts for no more than 50% of the monthly income.