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Concrete Analysis | Handy mortgage tips and pitfalls to avoid for first-time buyers of new houses in Hong Kong
- Buyers should bear in mind that the caps new loan-to-value ratios are applicable to stage payment only and not immediate mortgage payment
- Immediate payment is settled within 90 to 180 days, while stage payment is due only when the property construction is completed
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As the vaccine programme continues to help contain the Covid-19 pandemic in Hong Kong, home prices have rebounded substantially in recent months. A flood of cheap money unleashed by global central banks has found its way into fixed assets including residential properties.
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With increasing consumer confidence in the property market, buyers have responded with enthusiasm to new homes launched over the past few quarters, exceeding expectations. In particular, mega-developments from The Pavilia Farm in Tai Wai to South Land in Wong Chuk Hang, briskly sold out and broke multi-year records in subscriptions along the way.
For first-time homebuyers, it is essential to be equipped with some mortgage tips of first-hand properties.
Compared to a few years ago, buying a home in Hong Kong has become more affordable in spite of the rising prices. The reason is that the government had relaxed the cap on loan-to-value ratio in 2019. The maximum property value eligible for mortgage loans of up to 80 per cent loan-to-value (LTV) ratio is now HK$10 million (US$1.28 million) while that for 90 per cent LTV ratio has been lifted to HK$8 million.
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Inside the HK$10.8 million flat up for grabs in Hong Kong’s vaccine lottery
Inside the HK$10.8 million flat up for grabs in Hong Kong’s vaccine lottery
Nevertheless, when it comes to buying first-hand uncompleted properties, homebuyers should bear in mind that the new LTV ratios are applicable to stage payment only rather than immediate mortgage payment.
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