Due to the high housing price in Hong Kong, more and more property buyers tend to apply for first and second mortgage at the same time to reduce the down payment amount. Interest rate of second mortgage, however, is generally higher than that of first mortgage, therefore appliants should carefully estimate the costs and their repayement ability before making a decision.
According to the guidelines issued by the Hong Kong Monetary Authority, applicants who apply for mortgages from banks have to pass a ""stress test"", in which the loan from both first and second mortgage would be calculated together. To pass the test, the borrower?s monthly mortgage payment cannot exceed 50% of household income under the current basis point; Assumed that mortgage rate increase of 200 basis points, and the resulted monthly mortgage payment cannot exceed 60% of the borrower's household income.
According to the guidelines issued by the Hong Kong Monetary Authority, applicants who apply for mortgages from banks have to pass a ""stress test"", in which the loan from both first and second mortgage would be calculated together. To pass the test, the borrower?s monthly mortgage payment cannot exceed 50% of household income under the current basis point; Assumed that mortgage rate increase of 200 basis points, and the resulted monthly mortgage payment cannot exceed 60% of the borrower's household income.