HKMA en­hances Re­verse Mort­gage Pro­gramme

The Pak Banker - - Front Page -

HONG KONG

The Hong Kong Mort­gage Cor­po­ra­tion Lim­ited (HKMC) to­day an­nounced that three en­hance­ments to the Re­verse Mort­gage Pro­gramme will come into ef­fect on 16 Novem­ber 2012, bring­ing greater flex­i­bil­ity and ben­e­fits to both ex­ist­ing and prospec­tive re­verse mort­gage bor­row­ers.

Th­ese en­hance­ments in­clude: in­creas­ing the max­i­mum spec­i­fied prop­erty value for pay­out cal­cu­la­tion from HK$8 mil­lion to HK$15 mil­lion. For prop­er­ties worth over HK$8 mil­lion, a dis­count will be ap­plied in com­put­ing the spec­i­fied prop­erty value. El­i­gi­ble ex­ist­ing bor­row­ers with orig­i­nal prop­erty value over HK$10 mil­lion1 may opt to re­ceive a higher monthly pay­out; low­er­ing the min­i­mum age of bor­row­ers from 60 to 55 in re­sponse to re­quests from po­ten­tial ap­pli­cants be­low the age of 60, e.g. early re­tirees and cou­ples with one spouse younger than 60 (see An­nex B for the rel­e­vant monthly pay­out ta­ble); and in­creas­ing the max­i­mum lump-sum pay­out amount.

For bor­row­ers draw­ing a larger lump sum, there will be cor­re­spond­ingly a low­er­ing of the monthly pay­out amount. Bor­row­ers who opt to with­draw the max­i­mum amount of lump-sum pay­out and forgo the monthly pay­outs will still be en­ti­tled to live in their prop­erty for the rest of their life.

Mr Peter Pang, Ex­ec­u­tive Di­rec­tor of the HKMC and Deputy Chief Ex­ec­u­tive of the Hong Kong Mon­e­tary Author­ity, said th­ese en­hance­ments were devel­oped af­ter con­sul­ta­tion with stake­hold­ers on how the HKMC's Re­verse Mort­gage Pro­gramme can bet­ter meet the need for qual­ity life among the el­derly in Hong Kong.

With th­ese im­prove­ments to the re­verse mort­gage prod­uct, more peo­ple in Hong Kong will be­come el­i­gi­ble to take out a re­verse mort­gage, thereby avail­ing them­selves of more flex­i­bil­ity in their fi­nan­cial plan­ning af­ter the age of 55. The banks will be in­form­ing the ex­ist­ing re­verse mort­gage bor­row­ers of the en­hance­ments and the ar­range­ment if they should wish to ap­ply for changes to their ex­ist­ing terms of the re­verse mort­gage. For more de­tails, please visit the HKMC web­site.

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