Homeowners will be able to seek mortgages worth up to 90% of their property's value from Hang Seng Bank, and take up to 30 years to pay them down under a new delegated underwriting arrangement signed today between the bank and the Hong Kong Mortgage Corporation.

Hang Seng Bank is the first bank to enter into such an arrangement with the HKMC. It allows the bank to offer fast and efficient mortgage services to meet rising demand.

Under the arrangement, borrowers can request a maximum loan amount of  $5 million. They must have a regular salary and a maximum debt-to-income ratio of 40%. Applications that fall outside these criteria will continue to be submitted to the HKMC for approval.

Rising demand for 90% loan-to-value mortgages

Hang Seng Bank's Managing Director and General Manager Mok Wai-kin said the bank has seen rising demand for 90% loans in light of the improved sentiment in the property market.

Mr Mok expects customers to benefit as the current approval procedures for mortgage insurance loans will be streamlined.

HKMC's Chief Executive Officer Peter Pang said the current approval turnaround time for mortgage insurance programme applications is two days. As most banks have become familiar with the programme's eligibility criteria and underwriting standard, the corporation is confident that it can delegate the underwriting of the more straightforward applications to the originating banks without affecting the asset quality of the insured mortgages.

This will speed up the approval process and make it even more convenient to potential homebuyers, Mr Pang said.

Maximum payback period extended five years

Responding to the requests from banks and homebuyers, the HKMC has also decided to extend the maximum payback period for 90% loan-to-value loans to 30 years from 25 years, in line with that of insured mortgages with an 85% ratio. The wider selection of mortgage insurance products and services will provide more choices to suit homebuyers' varying needs.

"The relaxation of the maximum tenor will help to promote homeownership by reducing the monthly mortgage repayment amount and enabling more homebuyers to meet the maximum 50% debt-to-income ratio through extending the tenor of the mortgage loan," Mr Pang said.

"Working closely with banks, the HKMC stands ready to facilitate mortgage arrangements that are considered helpful to homebuyers."

About Hong Kong Mortgage Corporation