New | Finance firms upend HKMA’s lending caps on property, adding fuel to red hot market
Convoy Global and ETC Finance are teaming up with several property agents to lend up to 90 per cent the value of apartments, shops and industrial units
Two finance firms are challenging the Hong Kong Monetary Authority’s mortgage lending caps , offering more financing than current bank loans to attract new borrowers ahead of a possible interest rate increase in December.
For units worth more than HK$12 million (US$1.5 million), the loans-to-value ratio, or LTV ratio, could be up to 80 per cent for 30 years.
The finance firms charge an interest rate of between 2 and 2.5 percentage points below the prime lending rate, which stands at between 5 per cent and 5.25 per cent in Hong Kong.
Hong Kong’s bank loans are capped at 60 per cent of the value of homes between HK$6 million and HK$10 million, and 50 per cent for homes worth more than HK$10 million, according to February 2015 rules by the Hong Kong Monetary Authority.