in October Policy Address the relaxation of the mortgage insurance plan to help first home buyers qualify for 90% and 80% mortgage ceilings to 8 million and 10 million respectively
The Secretary for Financial Affairs and the Treasury, Mr Lau Yi-cheung, in a recent written reply to Members’ enquiries, stated that from October 17 to November 22, a total of about 1,300 applications have been approved by the securities companies, more than nine of which became first home buyers.
More than 90% of first-time customers
Liu Yixiang said that the latest amendments to the mortgage insurance plan are designed to provide more appropriate support for first-time home buyers or property changers who have the ability to repay but lack sufficient first installments. From October 17th to November 22nd, the insurance company approved a total of about 1,300 applications, more than nine of which became first-time home buyers.
Liu Yixiang emphasized that although the property price cap of the insurance plan has been adjusted, borrowers still need to meet certain eligibility criteria when applying for the insurance plan, including a 50% contribution income ratio and the need to pay additional insurance costs to Mitigate risks. Mortgage insurance companies have additional eligibility requirements for borrowers who apply for more than 80% of mortgage insurance, including that the applicant must be a first-time home buyer and a fixed salary.
Liu Yixiang also said that the fluctuation of the property market is affected by many different factors. According to the insurance company, the insurance market will closely monitor the status of the property market and review the effectiveness of the plan in a timely manner. The government has repeatedly reminded the public that home ownership is the most important investment in life, and prospective home buyers should carefully consider their own home purchase needs and repayment ability. Before making a decision to buy a home, the public must analyze it carefully, do what they can, and pay attention to various potential risks.
Green light for MPF buying
In addition, as to whether it will consider allowing first-time home buyers to use MPF to pay the first period and related expenses, Liu Yixiang said that the MPFA has reviewed relevant arrangements in other countries and regions, but the MPF contribution ratio in Hong Kong is low. Allowing the use of MPF home purchases will significantly weaken the MPF protection available to scheme members after retirement.
As of the end of last year, each MPF member only had an accrued benefit of 186,000 yuan on average. Therefore, early withdrawal of some equity has limited practical effect on home ownership. In addition, the risk of real estate prices is much higher than the MPF fund investment, such as accrued Equity is used to pay the first installment in one lump sum. When the property price drops and the owner is unable to pay the mortgage, it may disguise his retirement savings in disguise, or even cause the public to bear extra debt, which will run counter to the goal.