Insights for buyers of tong lau: beware of mortgage terms and repayment periods!
Understanding tong lau mortgage terms and application requirements can help buyers avoid additional financial burdens.
Hong Kong's property prices have remained high, making it a daunting task for the average citizen to purchase a home. However, there is a relatively affordable housing option in Hong Kong, which is tong lau. The price per square foot of tong lau is about 30-40% lower than that of conventional buildings, and the mortgage-to-value ratio is relatively higher, making it a popular choice among buyers. But, besides full payment, obtaining a mortgage to purchase tong lau is not a simple process. Here are some things that buyers should be aware of when buying tong lau.
One of the key factors that tong lau buyers should pay attention to is the repayment period for their mortgage. Similar to conventional buildings, the repayment period for a tong lau mortgage can be up to 30 years. However, the repayment period for a tong lau mortgage is influenced by various factors, such as age, building age, and mortgage-to-value ratio.
For non-high mortgage-to-value ratios, most banks determine the maximum repayment period by subtracting the building age from 75. The maximum repayment period for a mortgage is 30 years, but if the age of the tong lau is over 45 years, the maximum repayment period cannot be applied for 30 years. For example, if the tong lau is 55 years old, the maximum repayment period is 75-55=20 years. However, some banks may use the "80 minus building age" method to determine the maximum repayment period to attract new customers.
For high mortgage-to-value ratios, most banks also use the "75 minus building age" method to determine the maximum repayment period. However, some banks will also calculate the maximum repayment period based on both "building age" and "age of applicant," and choose the shorter period. For example, if the age of the tong lau applicant is 50 and the building age is 55, the maximum repayment period based on age is 75-50=25 years, and based on building age is 75-55=20 years. Because the bank will choose the shorter period to determine the maximum repayment period for the tong lau mortgage, even if the maximum repayment period calculated based on age is 25 years, the bank will still use the building age calculation of 20 years.
There are other things that buyers should be aware of when purchasing tong lau. First, tong lau buildings are usually old, so buyers need to carefully inspect the structure and facilities to ensure their safety and usability. Second, tong lau buildings usually do not have elevators, which can be difficult for the elderly or those with mobility issues. Finally, buyers should consider the surrounding environment, including transportation convenience, security, and neighborhood relations. These factors can affect the value and quality of living in tong lau.
Overall, the threshold for purchasing tong lau is relatively low, but buyers still need to pay attention to the mortgage repayment period, non-high and high mortgage-to-value ratios, and other factors. Additionally, buyers need to carefully inspect the structure and facilities of the tong lau, as well as consider the location and surrounding environment. By paying attention to these details, buyers can choose a tong lau that is suitable for them and complete the transaction smoothly.