"Exclusive Insight" H-Plan vs P-Plan: Which is More Cost-Effective for Homeownership?

What are the Differences between Purchasing Homeownership Scheme (HOS) and Housing Authority (HA) Flats?

Have you ever considered whether you can choose your preferred mortgage plan when purchasing a public housing flat in Hong Kong? In this article, we will discuss the options available for homeownership schemes.

There are two main repayment plans for public housing mortgages: H-Plan and P-Plan. H-Plan, short for "Interest-Only Plan", means that you only need to pay the interest on the loan each month, without repaying the principal. However, the total interest paid over the entire loan period will be higher. P-Plan, short for "Principal and Interest Plan", means that you need to repay both the principal and interest each month, but the total interest paid over the entire loan period will be lower.

If you are purchasing a Homeownership Scheme flat, you can choose either H-Plan or P-Plan depending on your personal needs and financial situation. However, if you are purchasing a Housing Authority flat, you can only choose P-Plan as the loan is provided by the government and they prefer borrowers to repay the loan within a reasonable period of time.

Apart from the repayment plans, there are other differences between purchasing a Homeownership Scheme flat and a Housing Authority flat. For example, the interest rate for Homeownership Scheme mortgages is lower than that of Housing Authority mortgages. Homeownership Scheme flats can also be resold to non-eligible buyers, while Housing Authority flats can only be sold to eligible buyers. Additionally, the resale price of Homeownership Scheme flats is more flexible than that of Housing Authority flats, which is subject to certain restrictions.

In conclusion, the choice of mortgage plan should be based on individual needs and financial situation. There are also many other differences between purchasing a Homeownership Scheme flat and a Housing Authority flat, so it is important to evaluate them carefully before making a purchase decision. Furthermore, buying a flat involves multiple factors, such as location, age, and size of the flat, and buyers should be well-prepared and avoid financial stress that may impact their quality of life.