Guide to Home Mortgages Hong Kong

by SavvyinHK
November 30, 2020

Wanting to learn more about mortgages Hong Kong? We have created this guide to help provide an overview of all that is involved with obtaining a mortgage in Hong Kong. 

Hong Kong has one of the most unaffordable housing markets globally, with the median home price now equal to approximately 21 times the median annual household income of its residents. 

If you plan to own your own home in Hong Kong, it’s unlikely that you’ll be able to do it without a house mortgage.

In this article, we highlight the key factors involved in securing home mortgages. Key points we cover include;

  • Initial down payments
  • The benefits of using a mortgage broker 
  • The best mortgage calculator when buying an apartment in Hong Kong
  • The importance of bank valuations in Hong Kong
  • The benefits of applying for home mortgages with multiple banks

Or if you already own an apartment and are looking to refinance, we also have tips.  Our refinancing tips include;

  • Why you should periodically check interest rates when you own your own home in Hong Kong
  • Why being aware of the prepayment penalty period is so important


What are the most important factors to consider when obtaining home mortgages Hong Kong?

Mortgage brokers can help save you both time and money when you're trying to secure home mortgages Hong Kong.

Photo courtesy of

First of all, let’s start with the most important factors to consider when you want to obtain a home mortgage in Hong Kong. Owning a home in Hong Kong is expensive, and there are quite a few things we want to tell you.

1. Initial Down Payment

If you are purchasing a residential property in Hong Kong, you will need a large down payment.

The government has strict rules about how much money people can borrow when buying a property in Hong Kong. This is one of the ways the Hong Kong government can help to regulate housing prices.

Your maximum loan size will depend on two major factors: whether you are buying a property for self-use and whether the majority of your income is derived in Hong Kong.

Generally, for properties priced below HK$10ml, a 60% loan with a maximum of HK$5m may be given. For properties priced at HK$10ml or more, you will only be able to borrow up to 50% of the property’s value.

The government sometimes changes the rules regarding LTVs (loan-to-value ratios). For the most up-to-date information, check the HKMA website.


2. The benefits of using a mortgage broker in Hong Kong

Mortgage brokers are in an excellent position to advise you about everything you need to know about Hong Kong mortgages.

Brokers should be familiar with lending terms across all the different banks in Hong Kong. They would be able to advise you as to which banks are currently offering the lowest interest rates and inform you about a whole host of other information, such as which banks are most likely to process mortgages faster.

You can expect the mortgage broker to do almost all the liaising between you and any of the banks. Note, a bank will directly pay the mortgage broker a commission; thus, your mortgage terms won’t be impacted by using a broker.

Savvy in HK tip: We’ve worked with Albert Fung on more than one occasion and was extremely impressed with how committed he was in helping to secure a mortgage— if you’re looking for an experienced mortgage broker, he’s your man.

Contact Albert via Whatsapp on 9267-3857. 


3. The best mortgage calculator when buying an apartment in Hong Kong

As we all know, homes in Hong Kong aren’t cheap. One of the first things you need to do is do some quick calculations on a mortgage calculator and see if the numbers make sense.

Check out the simple mortgage calculator on HSBC; you’ll quickly be able to estimate total repayment, monthly repayments, maximum loan amount, and total interest payable.


4. The importance of bank valuations when buying an apartment in Hong Kong

When it comes to buying an apartment in Hong Kong, you may have realtors tell you that a particular apartment is being offered at “below bank valuation” and, therefore, a great buy.

You might have wondered what this means and how you can actually check if you’re being told the truth.

Firstly, let’s talk about how you can do your own research on property valuations. While all banks will value properties differently, a simple way to get a rough guess of a particular property’s value is to check out the HSBC valuation tool.

This is a great tool; in seconds, you will be provided with HSBC’s latest valuation on any property in Hong Kong.

Now, let’s talk about why bank valuations are important.  Lenders need to understand how much a property is worth to make sure they are not lending you too much money.

In Hong Kong, banks have to follow strict guidelines from the HKMA regarding how much money they can lend you. These guidelines are set up in terms of maximum LTVs (Loan to value).

The V in “LTV” will be the bank’s internal valuation and not necessarily the price you pay, so knowing how a bank is valuing a particular property will help you understand how much money you can potentially borrow.


5. Cash Rebates

Buying a home in Hong Kong involves a lot more than just the home mortgages Hong Kong, there are so many other fees involved including paying management fees, government rate and also government rent.

Cash rebates related to mortgages in Hong Kong are a joy.  Many banks will provide you with a cash rebate upon a successful mortgage application. The cash rebates vary, but you can generally expect to receive between 0.5-1.5% of your overall mortgage in cash from your lending bank.

So, if you borrow HK$10ml, approximately two months after you take out the loan, you may be able to receive HK$50,000-$150,000 in your account.

Note, the exact amount will depend on the precise terms of your loan. Keep in mind; the lending bank will provide you with the complete details of possible cash rebates when you are applying for a loan.


6. Why you should apply for home mortgages with multiple banks in Hong Kong

Each bank has different rules and procedures when evaluating mortgage applications. If you are experiencing difficulties obtaining a mortgage from one particular bank, try approaching other banks.

For example, one bank might count overseas income (i.e., non-Hong Kong income) as zero. In contrast, another bank might allow foreign income to be included in their assessment of your income.

A good mortgage broker should be familiar with each bank’s individual mortgage rules and should be able to save you a lot of time by pointing you towards the best bank for your situation.


7. What items do you need to obtain a mortgage in Hong Kong?

To obtain a mortgage in Hong Kong, you will need to submit the following documents. Though the documents may depend on the mortgage lender, these are the common items that will be required:

  • Passport or an HKID card
  • Either a provisional or formal sales and purchase agreement
  • Salary deposit statements for the last 3 months
  • Your latest tax demand notice
  • In the absence of a tax demand notice, income proof documents must be submitted


8. How much money will you need to pay in total when buying an apartment in Hong Kong?

As soon as you sign a preliminary sales and purchase agreement in Hong Kong, you’ll have to start signing a lot of cheques. Of course, your mortgage will cover a large portion of the total purchase costs, but these are some of the costs you’ll need to be ready to pay:

  • When you sign a preliminary sales and purchase agreement, you’ll generally need to pay 5% of the property’s value (although this is subject to negotiation)
  • Approximately 2 weeks later, you’ll need to sign a formal agreement, and at this time, you’ll need to pay an additional 5% of the property’s value (again, the exact timing and the exact amount is subject to negotiation)
  • Generally, a property will complete around 6 weeks after you sign the preliminary S&P agreement (the exact date can be negotiated)
  • Upon completion of the property (i.e., once the property is finally yours), you will need to pay the real estate agents commission (you can expect to have to pay the real estate agent approximately 1% of the property’s value, but again this is subject to negotiation. We have seen this fee as low as 50bp and as high as 2%)
  • You will also need to pay stamp duty. This can be hefty. The total amount will depend on whether you hold an HKID card, whether it’s your only property, and other considerations, but the cost of the stamp duty in Hong Kong when you’re buying a residential property starts at 1.5% and moves higher from there. For a full table, check out this link.  Stamp duty fees move to 15% and above for non-first-time home buyers and non-Hong Kong residents.
  • Legal fees: will be approximately 0.1% of the property’s value
  • There are other costs to factor in too; the cost of renovations, the cost of moving, and the cost of buying new furniture. These costs can appear small in comparison to the other hefty costs mentioned above, but they can really add up


9. What fees are associated with owning a home in Hong Kong?

While buying a residential property in Hong Kong can turn out to a great investment, you do need to be mindful of the costs involved. In addition to paying your monthly mortgage, you can also expect to have to pay the following:

  • Management fees: if your apartment comes with facilities, you can expect these to be quite high. Even for apartments with no facilities, you can still expect monthly management fees of at least a few thousand Hong Kong dollars
  • Government rates: these rates are around 5% of the estimated annual rental and need to be paid every quarter. The exact amount of these rates are determined by the government and are intended to reflect differences in location, size, and facilities.

  • Government rent: this fee is approximately 3% of the property’s rateable value and needs to be paid on an annual basis. The cost of the is based on the lease of the Government land on which the premises stand.
  • Home contents & fire insurance: your lending bank might require you to purchase these. Don’t forget to do some research to find the best insurance rates.


Tips for refinancing residential property in Hong Kong

Next, we’ll talk about some tips related to refinancing residential property in Hong Kong. Just because you’ve secured a home mortgage doesn’t mean you should stop there.

It’s good to be on the look-out to see if there are opportunities to refinance to lower interest rates.

1. Periodically check interest rates when you own your own home in Hong Kong

Interest rates are constantly changing, so when you are securing a mortgage, make sure you know about current interest rates.

Photo courtesy of

Stay abreast of changes in interest rates. This will help you to potentially spot an opportunity to refinance your existing mortgage at a lower rate. 

While banks will generally advertise their mortgage rates on their websites, provides up-to-date mortgage information across all the banks. From interest rates, cash rebates, and prepayment penalty periods, they also offer news, property listings, and tips to help you with your homeownership journey.


2. Why prepayment penalty periods are so important in Hong Kong

Your bank will likely penalize you if you repay your mortgage within the first 2-3 years of the mortgage life. This penalty is known as an “early-repayment” penalty.

This penalty will apply regardless of whether you sell your apartment or move and refinance your loan to another bank. Costs will vary according to your individual case. 

Early repayment penalties are significant and could cost you up to 2% of the total repayment amount.


3. Banks may Match their Competitors’ Rates

If the prepayment penalty period for your current mortgage has ended and a different bank is offering lower mortgage rates, flag this to your current bank to argue for a better rate.

Chances are, your current bank will match the lower interest rate, which means more savings for you!

And staying with your existing bank should, of course, save you a whole lot of headaches related to filling out forms and providing a whole bunch of information to a new bank. 

When obtaining mortgages Hong Kong, there are some common mistakes that are made. We talk about the most common ones, and tell you how to avoid them.


What are some common mortgage mistakes in Hong Kong?

So if you are considering buying a home in Hong Kong, here are some things to avoid before applying for a mortgage, HK. You should be aware of these common mortgage mistakes:

  • Ignoring homeownership costs: It is not just the house mortgage that your home involves. There are other expenses, like quarterly government rates, insurance, repairs, and monthly management fees. So do not stretch overstretch yourself by having a monthly mortgage amount that is too high and might become difficult to manage.
  • Choosing to refinance at the wrong time: No matter how low the house mortgage rates are, it doesn’t mean it is the right time for you to refinance. Many factors need to be considered, like your credit score, savings, stake in the house, and the difference in interest rates.
  • Carrying two mortgages at a time: Don’t commit to buying a new home until you have sold your old one. Committing this mistake will create incredible financial pressure.
  • No future planning: Before buying a home in Hong Kong, it’s a good idea to have a good financial plan in place so that you can meet your financial obligations. Consider going to see a financial planner ahead of purchasing a new home.
  • Not monitoring the credit: Make sure your credit report is accurate. A bad credit report will result in bad loan deals. So credit monitoring is important.
  • Forgetting to add the real estate agent’s fee: Both buyers and sellers of a property can expect to pay a realtor’s fee. This fee is generally around 1% of the purchase price but can be negotiated.


How much stamp duty will I need to pay when buying a home in Hong Kong?

  • Regular Stamp duty: Don’t forget that you will need to pay stamp duty (i.e., pay money to the government) on top of the purchase price. The exact amount of stamp duty will be calculated according to the purchase price. The maximum (regular) stamp duty is 4.25% of the sales price.
  • Special stamp duty: This is a duty you will need to pay if you sell your home within 36 months of buying it.
  • Buyer’s stamp duty: This is an extra cost non-permanent-resident buyers will have to pay when buying a home in Hong Kong. It’s a flat rate of 15% of the purchase price.


Can non-permanent residents in Hong Kong obtain a mortgage?

Yes, non-permanent residents in Hong Kong can obtain a mortgage, but they will need to pay additional stamp duty fees. These additional stamp duty fees are high and equal a flat rate of 15% of the purchase price. Many non-permanent residents in Hong Kong will choose to wait until they become permanent residents in Hong Kong before purchasing a residential property.


What is the maximum Loan-to-Value allowed in Hong Kong?

The maximum Loan-to-Value (LTV) allowed in Hong Kong is 60%. But to obtain the maximum LTV, both you as the borrower and the property itself will need to meet several requirements, including; the property needs to be for self-use, you need to derive most of your income from Hong Kong,  and the property price needs to be below HK$10,000,000.



There are important nuances that you need to know when securing mortgages Hong Kong. We hope you are now armed with knowledge so that you can secure the best possible mortgages Hong Kong.

We wish you the best for your homeownership journey in Hong Kong. If we have missed any tips on securing mortgages Hong Kong, please let us know in the comment section below.

If you’re living in Hong Kong and want to learn more, check out A Guide for Newbies in Hong Kong. This article covers buying second-hand goods, finding an apartment in Hong Kong, and where to buy furniture.


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