Hong Kong Mortgage Corp (HKMC) is to consider today lifting the ceiling on its insurance programme by five percentage points in a move that would allow home-buyers to secure loans for up to 90 per cent of a property's value. HKMC's mortgage insurance programme, launched in April last year, enables home-buyers to circumvent a 70 per cent loan-to-valuation cap placed on lending institutions by the Hong Kong Monetary Authority. It allows banks at present to lend up to 85 per cent of a property's value without taking on any additional risks. However, the programme only covers the property for self-use, and monthly mortgage payments must not exceed half of the household's income. Since its launch, 4,133 home-buyers have applied for HK$8.5 billion of mortgages. Of that number, 3,466 received approval for loans totalling HK$7.2 billion. An HKMA spokesman said the decision to review the mortgage insurance ceiling was 'in response to market demand'. The HKMC's review of the scheme comes after the Liberal Party recently called on the Government to relax the mortgage-lending cap to make it easier for people to buy property. The cap, put in place in the 1990s, was designed to protect banks against falls in the value of property. The HKMA, the official mouthpiece of the HKMC, denied reports it planned to raise the cap to 90 per cent. It has been argued that relaxing the lending restrictions could provide a much needed boost to Hong Kong's stagnant property market. The recession has left local banks awash with cash as borrowing dried up, and this has led to fierce competition among institutions to lend to home-buyers. Keith Irving, banking analyst at Merrill Lynch, said he did not believe lifting the ceiling on mortgage loans would be sufficient to kick-start the mortgage market. According to Mr Irving, with real interest rates as high as they are, home-buyers are still concerned about capital depreciation.