Buying a home is one of the biggest financial decisions for Hong Kong families. When approving mortgages, banks consider not only the property valuation but also the applicant's repayment ability.
Debt Servicing Ratio (DSR)
Since 16 October 2024, the HKMA's regulatory DSR limit has been standardised at 50% across residential and non-residential property mortgages. It no longer varies by self-occupation or existing mortgages. This is a ceiling, not an approval promise: banks may apply tighter underwriting based on income stability, credit history and other debts.
Stress Test
The HKMA suspended the interest-rate stress-testing requirement in February 2024. The old “rate plus two percentage points / 60% stressed DSR” description is therefore outdated. Banks still assess affordability, and buyers should independently model rate increases of one to three percentage points.
Prime Rate (P) vs HIBOR
- P-rate: Based on the prime rate, usually quoted as prime minus a margin. More stable.
- H-rate: Based on the Hong Kong Interbank Offered Rate (HIBOR), with a cap rate. More volatile but generally cheaper than P-rate in recent years.
Down Payment and Loan-to-Value Ratio
Since 16 October 2024, the regulatory LTV cap has been standardised at 70%, regardless of residential property value, self-occupation or existing mortgages. If the bank valuation is below the purchase price, the buyer must fund the shortfall.
Mortgage Insurance
If you want to borrow more than 60%, you can use the mortgage insurance programme from HK Mortgage Corporation, allowing borrowing up to 90% after paying a premium (subject to income and property requirements).
Summary
Use the HK FinBox Mortgage Calculator to compare today's rate with rates one and two percentage points higher. Add management fees, rates, government rent, maintenance, insurance and renovation reserves. The estimate does not represent bank approval.