Helping hand for top-end borrowers

PUBLISHED : Saturday, 03 November, 2001, 12:00am
UPDATED : Saturday, 03 November, 2001, 12:00am

Bankers believe there will be only a small demand for the Government mortgage insurance programme to help people buy homes priced at up to HK$8 million.

The Government's Hong Kong Mortgage Corp (HKMC) is lifting the mortgage insurance programme ceiling from HK$5 million.

The new ceiling, effective from Monday, will allow buyers of deluxe homes - from HK$5 million to HK$8 million - to use the insurance programme to apply for 85 per cent mortgage loans against the usual 70 per cent.

Bankers said it was another move by the Government to make it easier for home buyers and to give a boost to the ailing property market. But they felt the expansion would be of little use as the average mortgage loan was just HK$1.32 million.

'This indicates there will be little demand for homeowners to borrow mortgage loans as high as HK$8 million,' a banker said.

'The move by the HKMC is another good try by the Government to prop up the property market, but is likely to do little to improve the weak market sentiment.'

However, the corporation said the expansion was due to requests by banks and there was demand for mortgage insurance in the deluxe market.

One of its missions in offering the mortgage insurance programme is to help people borrow a higher amount to buy a home of their own.

The Government launched the programme in March 1999.

After the latest change, home buyers who borrow less than HK$5 million will have a 90 per cent mortgage ceiling.