Big loans require insurance

Some major lenders in Hong Kong are prepared to loan as much as 95 per cent of the purchase price of a property. But built into the repayment plan is an insurance premium. 'If you, [for example] want to buy a HK$2million property, [some] banks can lend you 95 per cent at, say, a rate of prime minus 3.15 per cent', say Sharmaine Lau Yuen-yuen, chief economic analyst at mReferral. 'You might have to pay HK$8,381 each month, and the Mortgage Insurance Programme provides the insurance needed for an amount of up to 25 per cent of the property value, over 25 years, and in the process advances a mortgage loan of up to 95 per cent of the property value.'