The Hong Kong Mortgage Corp has expanded its insurance programme to cover loans for older properties in a move the government sees as benefiting both homeowners and buyers. Effective from today the programme expands to cover residential mortgages with a maximum combined age of property and loan tenor of 60 years, up from 50 years. The move will make it easier for buyers of older properties 'to obtain mortgages of a longer tenor and reduce the monthly repayment burden', the government-owned mortgage body said in a statement yesterday. The HKMC insurance scheme also allows mortgage seekers to arrange loans of up to 95 per cent of the value of the property, instead of the usual 70 per cent, by paying an insurance cover premium. Before the change, homebuyers of older property would either be capped by the 70 per cent mortgage rule or have to take out a shorter-period loan, such as a 10-year loan for a 40-year-old property, to qualify for the insurance scheme. The HKMC said the change would benefit many homeowners, noting that '38 per cent of the residential housing stock in the private sector was 25 years [old] or above as of the end of last year'. With a loan of $2 million and a mortgage rate of prime minus 2.8 percentage points, an extension in loan tenor by 10 years would reduce the monthly repayment amount by 26 per cent, from $10,308 to $7,594, according to the HKMC. Property agents and bankers said they welcomed the move. Brian Cheung Nam-chung, a senior manager of Liu Chong Hing Bank, said the extension would encourage sales of older properties. 'Many people like to buy older properties as they are cheaper and bigger than the newly built flats, but they find it hard to get the mortgages,' Mr Cheung said. 'The relaxation of the HKMC rules would help solve the problem.' The changes would also benefit sellers, he added. 'Some retired people have little cash on hand, but they own their home. The relaxation would make it easier for them to sell their flats or to mortgage their home to raise money to live on,' he said. Liu Chong Hing would offer loans in line with the rule change, he said. Buggle Lau Ka-fai, the chief analyst at Midland Realty, said the expansion of the mortgage insurance programme would stimulate the market for older properties. However, Terence Tong Ping-ching, a sales director of Centaline Property Agency, said banks were already willing to offer mortgages for older properties in areas such as Mid-Levels so the new rules would not have much impact.