What are the restrictions for mortgage loan applicants that already have more than one property?

30-11-2016

Restrictions for mortgage loan applicants that already have more than one property.

As a rule of thumb, the likelihood of self-used mortgaged property becoming delinquent is much lower than investment properties; hence, banks tend to grant mortgage loans for self-used properties rather than investment properties.

If a mortgage loan applicant already has a property and wishes to purchase a second property, banks will assess his repayment ability by considering whether the prior property is newly acquired and recently mortgaged or almost fully amortized etc.

Under prevailing Hong Kong Monetary Authority (“HKMA”) guidelines, the maximum LTV allowed for investment properties is 50%. Further, assuming the applicant already has been granted a mortgage loan for another property recently, and that the principal income of the applicant is not sourced in Hong Kong, the maximum LTV may be as low as 30%.

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