Individual clients (employees) supporting documents

1. Photocopies of Hong Kong ID cards or passports
2. Proof of address within the last 3 months (such as water, electricity bills)
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3. Bank payroll account records for the last 3 months (if your salary fluctuates, you need to provide proof of the last 6 months)
4. Payment slips/payment notices for the last 3 months (if your salary fluctuates, you need to provide proof of the last 6 months)
5. Government salaries tax bill/MPF contribution record of the most recent year
6. Provisional property sale and purchase agreement (for new mortgage)
7. Mortgage payment records (for remortgage or additional mortgage) in the last 3 months

The above documents are required for most banks, but not for a few banks Government salaries tax bill/MPF contribution record for the most recent year is required

When applying for New Purchase Mortgage or Remortgage, in addition to having a sufficient down payment, you also need to pass the Mortgage Stress Test. How is the Mortgage Stress Test calculated? According to the guidelines of the Hong Kong Monetary Authority, for applicants who do not own or guarantee other mortgage properties, the monthly mortgage payment under current mortgage cap rate can not exceed 50% of total income.After the mortgage cap or fixed rate plus 3% interest, the monthly payment cannot exceed 60%.

For applicants who already own or guarantee other mortgage properties, the stress test standard will be higher than normal, and the relevant standard will be tightened. The monthly mortgage payment under current mortgage cap rate can not exceed 40% of total income. After increasing 3% of the mortgage cap or fixed interest rate, the repayment cannot exceed 50% of the monthly income. The above basic repayment is the sum of the property repayment for the newly applied for mortgage and the mortgage repayment for the property already held or guaranteed.

However, under the Mortgage Insurance Program, there are specific banks who are able to approve your application if your monthly payment does not exceed 50% of your monthly income.

The loan-to-value ratio is simply understood as the mortgage-to-value ratio is the ratio of the property loan. For example, a 90% loan to value ratio mortgage requires 10% down payment excluding stamp Duty. In Hong Kong, where property prices are high, the loan-to-value ratio is also relatively higher, which reduces the down-payment of home buyers. According to the regulations of the Hong Kong Monetary Authority, a private residence with a price of less than 10 million can borrow a mortgage of up to 60% or 5 million, whichever is lower, while a private residence with a price of 10 million or more can borrow a mortgage of a maximum of 50%. If you are a first-time homebuyer, you are able to obtain a higher loan-to-value ratio through the Mortgage Insurance Program. The highest loan-to-value ratio can go up to 90% if the property is with a valuation of less than 10 million. For properties with valuation more than 10 million to less than 11.25 million, the maximum mortgage you can borrow is 9 million. Properties with valueation more than 11.25 million to 19.2 million, the maximum mortgage amount is 9.6 million.

There are two main mortgage plans in Hong Kong, which are commonly referred to as “Hibor Based Mortgage Plan (H Plan)” and “Prime Rate Based Mortgage Plan (P Plan)”. The "H Plan” refers to the 1-month Interbank Offered Rate (HIBOR) which fluctuates , but there will be a cap limit. For example, H + 1.3%, today's one-month HIBOR is 0.2%, the mortgage rate will be 1.5%, and the upper limit normally same as the “P Plan” for most banks. The interest rate of the "P Plan” is based on the Prime Rate of Banks. Large banks such as HSBC and Bank of China use P = 5% as the benchmark, and the mortgage interest rate for “P Plan” is P (5%) - 2.5% = 2.5%.

"H Plan” is generally applicable to private houses such as 1st-hand, 2nd-hand private houses, village houses, tenements, parking spaces and commercial buildings.

“P Plan” is generally applicable to government-guaranteed properties such as TPS, green and white form public housing, with a maximum repayment period of 25 years.