New Mortgage Insurance Plan Provides an “Escape Hatch” for Buyers
New Mortgage Insurance Plan Provides an "Escape Hatch" for Buyers
How can the new measures introduced by Chief Executive Carrie Lam ease the embarrassment of buyers who are avoiding skyrocketing property prices?
The Hong Kong real estate market has always been a hot topic of interest for the public, as property prices remain high and buyers face the challenge of obtaining high mortgages. In recent years, the government has been committed to solving the housing problem by implementing a series of measures, including the relaxation of mortgage insurance plans to provide an "escape hatch" for buyers who have to take out high mortgages.
In the 2019 Policy Address, Chief Executive Carrie Lam announced the relaxation of the mortgage insurance plan, which extended coverage to properties worth between HKD 6 million and HKD 10 million. This measure allows buyers to apply for mortgage insurance coverage of up to 80% when transferring their mortgage, reducing their financial burden. However, mortgage brokerage firms have pointed out that the new mortgage insurance plan is only suitable for completed residential properties, and that additional loans cannot be added during mortgage transfer. Nevertheless, this plan provides a solution for the awkward issue of property prices skyrocketing to reach the mortgage transfer threshold.
Specifically, buyers can use the "pay-as-you-go" plan when purchasing a new property, and combine it with a developer's payment plan such as the "breathing plan" or "second mortgage" to take out a high percentage of mortgages in advance. When the developer's first or second mortgage enters a high-interest period in the future, buyers can then apply for mortgage insurance coverage of up to 80% to transfer their mortgage and reduce their financial burden.
Overall, the new mortgage insurance plan provides buyers with more choices and enables them to be more flexible in responding to changes in the real estate market. However, buyers need to abide by relevant laws and regulations and avoid any illegal activities. At the same time, buyers should also approach the real estate market rationally and not blindly pursue property prices. Instead, they should choose suitable properties and mortgage plans to realize their housing dreams. Additionally, the government should increase its efforts to introduce more housing policies and alleviate the housing pressure on citizens, so that more people can enjoy quality housing.
In addition to relaxing mortgage insurance plans, the government has also implemented a series of other measures, including the construction of public housing, increasing land supply, and setting up elderly housing programs, to address the housing problem from multiple angles. Moreover, the government should strengthen its supervision of the real estate market to prevent the formation of market bubbles and protect the housing rights and interests of citizens.
Overall, the new mortgage insurance plan provides citizens with more choices and allows buyers to be more flexible in responding to changes in the real estate market. The government should also increase its efforts to introduce more housing policies, alleviate the housing pressure on citizens, and ensure that everyone can realize their dream of having a secure and comfortable home.