Key Information

inSight
Speeches
Speeches by Speaker
Norman T.L. Chan
Peter Pang
Eddie Yue
Arthur Yuen
Zeti Akhtar Aziz
Raymond Li
Edmond Lau
Esmond Lee
Meena Datwani
Vincent W.S. Lee
James Lau
Joseph Yam
Y K Choi
William Ryback
David Carse
Tony Latter
Andrew Sheng
Hans Genberg
Simon Topping
Michael Taylor
The Honourable Donald Tsang
Chen Yuan
Dai Xianglong
Don Brash
Jaime Caruana
Andrew Crockett
Mario Draghi
David Eldon
Stanley Fischer
Timothy F. Geithner
Stephen Grenville
Kenneth G. Lay
William McDonough
Ernest Patrikis
Glenn Stevens
Jean-Claude Trichet
Tarisa Watanagase
Zeti Akhtar Aziz
Carmen Chu
Alan Au
Press Releases
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
Press Releases by Category
Bogus Voice Message Phone Calls
Banking in Hong Kong
Fraudulent Websites, E-mails and Telephone System, and other fraud cases
Granting of Banking Licences
Exchange Fund
Table of Multiples of Notes and Payments for Allotted Amount under non-competitive tender
Table of Multiples of Notes and Payments of Application Amount under non-competitive tender
Tender of Exchange Fund Bills and Notes
Tender Results of Exchange Fund Bills and Notes
Tentative Issuance Schedule for Exchange Fund Bills and Notes
Appointments and Departures
HKMA Pay Review
HKMA Publications
Speeches
The Hong Kong Mortgage Corporation
Hong Kong Note Printing Limited
Hong Kong Institute for Monetary Research
Exchange Fund Investment Limited
Others
Hong Kong Financial Infrastructure
International Relations
Investment Products Related to Lehman Brothers
Monetary Policy
Notes and Coins
Renminbi business
Credit Card Lending Survey
Monetary Statistics
Residential Mortgage Survey
Year 2000
Others
Guidelines and Circulars
Guidelines
Circulars
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
515.5995

Press Releases

Reverse Mortgage Pilot Scheme

The Hong Kong Mortgage Corporation Limited (HKMC) today (Thursday) announced that its Board has approved the HKMC to launch a pilot scheme on reverse mortgage in 2011.

The decision was reached after extensive consultation with the key stakeholders and a territory-wide survey of the potential users. The survey (conducted in October and November 2010) interviewed 1,005 homeowners aged 60 or above, whose properties were mortgage-free or almost mortgage-free. About 44% of the respondents supported the introduction of reverse mortgage in Hong Kong and almost a quarter of the respondents indicated that they would consider participating in such a scheme.

Given the positive findings of the opinion survey, the HKMC has decided to launch a reverse mortgage pilot scheme in 2011. The pilot scheme will enable the elderly people to use their self-occupied and non-mortgaged residential properties as collateral to enter into reverse mortgage loans in return for a stream of annuity payments while staying at their original residence.

Under the pilot scheme, borrowers can opt to receive monthly annuity payments over a fixed period of 10, 15 or 20 years or over their whole life span, while they will continue to be responsible for the on-going property maintenance as well as the settlement of rates, government rents and management fees, etc. Even when the annuity payment term has expired, the borrowers can continue to stay in the residence for the rest of their lives. Upon the death of all borrowers of a reverse mortgage, the bank could repossess and dispose the underlying property. After disposal, if the realised value of the property (net of disposal expenses) is in excess of the total outstanding loan balance (principal + accrued interest + insurance premiums), the banks will give the surplus to the borrowers' inheritors. On the contrary, if there is any shortfall, it will be covered by the HKMC's insurance. Alternatively, the borrowers' inheritors may, within a certain period, choose to repay the reverse mortgage loan and redeem the underlying properties.

Details of the key eligibility criteria and proposed annuity payment levels are set out at Annex A and Annex B.

Mr Peter Pang, the Executive Director of the HKMC, said, "The HKMC will actively engage banks interested in participating in the pilot scheme to finalise the detailed arrangements with a view to launching it in the first half of 2011. In particular, an effective pre-sale counselling mechanism will be devised to ensure that the borrowers will have a good understanding of their rights and obligations before drawing reverse mortgage loans. We hope that with the introduction of reverse mortgage, elderly people can have an additional means to obtain steady cash flows to improve their standard of living while staying in their own home."

Annex A and Annex B

The Hong Kong Mortgage Corporation Limited
16 December 2010

Last revision date: 1 August 2011
ABOUT THE HKMA
The HKMA
Tender Invitations
Careers@HKMA
Legislative Council Issues
Links
The HKMA Information Centre
KEY FUNCTIONS
Monetary Stability
Banking Stability
International Financial Centre
Exchange Fund
PUBLICATIONS & RESEARCH
Annual Report
Half-Yearly Monetary & Financial Stability Report
Quarterly Bulletin
HKMA Background Briefs
Reference Materials
Research
MARKET DATA & STATISTICS
CMU Bond Price Bulletin
Economic & Financial Data for Hong Kong
Monthly Statistical Bulletin
Monetary Statistics
KEY INFORMATION
Press Releases
Speeches
Guidelines & Circulars
Forthcoming Events
inSight
OTHER INFORMATION
Information in Other Languages (Bahasa Indonesia, हिन्दी, नेपाली, ਪੰਜਾਬੀ, Tagalog, ไทย, اردو)
Account Opening
Consumer Corner
Consumer Education Programme
Complaints about Banks
Complaints about SVF Licensees
Internet Banking
Fraudulent Bank Websites, Phishing E-mails and Similar Scams
Be Careful of Bogus Phone Calls and SMS Messages
Authenticate the Callers and Bank Hotline Numbers
Register of AIs & LROs
Register of Securities Staff of AIs
Register of SVF Licensees
Investment Products Related to Lehman Brothers
Photo Gallery