Question 1｜Only 10% Down Payment?
Answer: It's true, but with clear prerequisites.
Traditional bank mortgages can lend up to 70% (this is the unified cap after the Hong Kong Monetary Authority relaxed it on October 16, 2024). However, to achieve a 10% down payment (borrowing 90%), you do so through the Hong Kong Mortgage Corporation (HKMC)'s "Mortgage Insurance Program".
Policy Background
- The thresholds were already relaxed in 2019 (Lam Cheng Plan) and 2022 (Uncle Bo Plan).
- Under the current mechanism, for completed properties priced at HKD 10 million or below, first-time homebuyers have the opportunity to apply for a maximum 90% mortgage.
However, to achieve a "90% mortgage," you must simultaneously meet:
- No Hong Kong residential properties are owned under your name at the time of application
- All applicants are fixed-salary earners
- The property is for self-occupation
If any one condition is not met, you may only be able to secure an 80% mortgage, or even drop to 70%.
You Must Know the Cost
High loan-to-value mortgages require the payment of mortgage insurance premiums. Although the down payment is significantly reduced:
- The actual loan amount increases
- Monthly repayments and total interest expenses will also rise accordingly
The mortgage insurance premium can be paid immediately or arranged through the bank to be added to the mortgage loan and repaid in installments, but regardless, this is the actual cost of a high loan-to-value mortgage.
Question 2｜What Does "Reserving 4-5% for Miscellaneous Expenses" Mean?
Answer: This is just a "safe reference value".
Must-budget cash expenses include:
- Stamp Duty (Ad Valorem Stamp Duty, Second Standard Rate, commonly known as First Home Tax)
- Starting from February 26, 2025, residential properties priced at 4 million or below only require a stamp duty of 100 HKD
- For a 6 million property as an example, the stamp duty is 135,000 HKD (2.25%)
- Real Estate Agent Commission (market common is about 1% of the property price)
- Legal Fees and Document Fees (generally around 10,000 to 20,000 HKD)
Biggest Variable: Renovation and Maintenance
- New or semi-new building: May only require furniture additions
- Old building, tong lau (tenement house), units needing restoration: Electrical and plumbing renovations can easily cost 300,000–500,000 HKD
Problem Three｜Can I Ask My Boyfriend/Girlfriend to Be a Guarantor to Help Me Pass the Stress Test?
Answer: Legally possible, but extremely high risk.
Currently, the maximum Debt Servicing Ratio for residential mortgages is 50%. This means that all your monthly repayments (including mortgage, credit card, personal loans, etc.) should not exceed half of your income.
If you cannot meet this limit on your own income, technically, you can introduce a guarantor. But you must understand that being a guarantor is not as simple as "lending a name".
Bank Acceptance:
Banks usually only accept immediate family members (parents, spouses, siblings) as guarantors. Using an unmarried partner (boyfriend/girlfriend) as a guarantor will be subject to extremely strict bank review (may require proof of cohabitation) and may even be rejected.
The Real Legal Consequences of Being a Guarantor Are:
- Once the borrower is unable to repay the loan
- The bank can directly pursue the guarantor for repayment
- The guarantor's liability typically has no monetary cap and no automatic termination mechanism
Even if you later break up or the relationship deteriorates, the guarantor's responsibility does not disappear as a result. If you wish to be "removed," the bank must re-approve the owner's income alone; if the income is insufficient, you will be locked into the debt responsibility for that property for an extended period.
Question 4 | If property prices fall and become "negative equity," will the bank really not repossess the property?
Answer: Usually not, but they have the right according to the contract.
Negative equity refers to the outstanding loan amount being higher than the property's market value.
In Hong Kong's past multiple property market downturns (such as in 2003, 2008, and recent years), as long as property owners make payments on time and do not violate the terms, banks rarely immediately demand loan repayment solely because property prices have fallen.
However, you must understand one point: mortgage contracts typically state that banks have the right to demand immediate loan repayment under specific circumstances, including:
- Defaulting on payments or prolonged late payments
- Providing false information
- Violating property usage declarations
Question Five | What are the practical impacts of the "spicy withdrawal" on first-time home buyers?
"Spicy withdrawal" refers to the government's comprehensive cancellation of residential property demand management measures on February 28, 2024, namely:
- SSD (Special Stamp Duty): Penalties for selling property within 3 years of purchase.
- BSD (Buyer's Stamp Duty): Heavy taxes for non-permanent residents of Hong Kong buying property.
- NRSD (New Residential Stamp Duty): Heavy taxes for purchasing a second property.
Previously, selling a property within three years of purchase would incur heavy tax penalties; now, if you need to sell due to unemployment, mortgage pressure, or changes in life plans, you can exit immediately without having to pay additional punitive taxes.
🔎 Before Entering the Market in 2026, Ask Yourself These 3 Questions
- After the down payment and miscellaneous fees, do I still have at least 6 months of emergency cash?
- Am I taking on risks beyond my capability through guarantees or joint applications?
- Do I accept that we are currently in a relatively high-interest environment and can sustain the repayments long-term?