FS cautious on mortgage policy

January 15, 2018

Financial Secretary Paul Chan has cautioned against relaxing the loan-to-valuation ratio for homebuyers in the face of a potential interest rate hike.

 

Speaking to reporters after attending the 11th Asian Financial Forum today, Mr Chan said the Government understands the concerns of potential homebuyers who cannot afford a down payment.

 

But it must consider the impact of interest rate hikes and other factors when handling the loan-to-valuation ratio.

 

"This year (the) interest rate is going to rise, given the situation in the US.

 

"At this stage, if we were to relax (the) mortgage percentage to allow those who are with marginal financial ability to enter into the property market, if there were a downward adjustment in the market, these people would be the most hard hit.

 

"In that case, the impact on them would be very, very significant. That's why we have been taking a very cautious attitude."

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