The Reverse Mortgage Programme enables people aged 55 or above to enjoy greater financial flexibility by pledging their residential properties in Hong Kong for a reverse mortgage loan. While continuing to live in the mortgaged property for the rest of life, the borrower is not required to repay the outstanding loan balance.

The Programme is operated by HKMC Insurance Limited, a wholly-owned subsidiary of The Hong Kong Mortgage Corporation Limited. 

Product Features and Benefits

• Flexible Payment Terms

Borrower can choose to receive monthly payouts for a fixed period of 10, 15 or 20 years or throughout the borrower’s entire life, and may apply to switch to another payment term after drawdown of a reverse mortgage loan. The monthly payout amount will remain unchanged throughout the payment term. Once the amount is determined, it will not be affected by the property price, interest rate, inflation/deflation or any other economic factors. However, if the borrower takes out a lump-sum payout, the amount of the subsequent monthly payouts will be reduced subject to the lumpsum payout amount taken out.

• Lump-sum Payouts

Borrower can also choose to receive lump-sum payouts at the time of initial loan application and/or any time during the selected payment term for specific purposes such as refinancing of an existing reverse mortgage or full repayment of other existing mortgage of the borrower’s property which is pledged as security for the relevant reverse mortgage loan (not applicable to the property owned by a limited company), settlement of land premium for subsidised housing property, or payment for home improvement, repairs and maintenance and/or medical expenses.

•  Flexible Arrangement to Rent out Property

Mortgaged property can be rented out under specific circumstances for a higher monthly income.

• Lifetime Home Residence

After taking out a reverse mortgage loan, property owner is entitled to stay in the property for the rest of his/her life, even after the payment term is due. However, interest and mortgage insurance premium will be debited to the outstanding loan amount. Lender will have the right to terminate the reverse mortgage loan under specific circumstances. If the outstanding loan amount is not repaid in full, the lender will take possession of and dispose of the property to recover the outstanding loan amount, in which case all occupants of the property will need to move out.

• No Repayment During Lifetime

In general, the borrower is not required to repay the outstanding loan amount during his lifetime, unless the reverse mortgage loan is terminated under specific circumstances.

•No Penalty for Early Repayment of Loan

Full repayment of reverse mortgage loan and redemption of mortgaged property can be made at any time without penalty. However, partial repayment is not accepted.

• Six-month cooling-off period

If a reverse mortgage loan is terminated for whatever reasons within the first 6 months and the outstanding loan amount is fully repaid on the proposed repayment date, a refund and waiver of mortgage insurance premium will be given. However, the borrower is still required to bear the accrued interest, financed fees (if any) and the relevant fees in relation to the termination of the reverse mortgage loan.

Eligibility for Applying for a Reverse Mortgage Loan

Borrower must:

• be aged 55 or above (or aged 60 or above for owners of subsidised sale flats with unpaid land premium) and a holder of a valid Hong Kong identity card; and
• not be an undischarged bankrupt or otherwise subject to bankruptcy petition or individual voluntary arrangement.

Property offered as security must:

• be a residential property in Hong Kong (property acquired by deed of gift may be considered);
• to be owned by:
  1. the borrower as sole and beneficial owner or as joint tenants (if there is more than one borrower); or
  2. a limited company, incorporated in Hong Kong, wholly and directly held by the borrower (or if there is more than one borrower, all borrowers);
• not exceed 50 years of age (otherwise it will be considered on a case-by-case basis and subject to building inspection);
• not be subject to any resale restrictions (except for the alienation restriction of subsidised sale flats imposed by the relevant authority); and
• not be rented out
  (The borrower may apply to rent out the mortgaged property if it has been owned for at least one year and all the borrowers have:
  1. declared that they have retired; or
  2. moved out to obtain elderly or medical care.
  If the property is a subsidised sale flat^ with unpaid land premium, the borrower must obtain a written consent from the relevant authority, in addition to the above requirement of property ownership.)

^For a subsidised sale flat with unpaid land premium, it must be under the Home Ownership Scheme, Private Sector Participation Scheme, Tenants Purchase Scheme and Green Form Subsidised Home Ownership Scheme of the Hong Kong Housing Authority (HA), the Flat-For-Sale Scheme, Sandwich Class Housing Scheme and Subsidised Sale Flats Projects of the Hong Kong Housing Society (HS), or any other subsidised housing schemes as accepted by HKMCI from time to time.

Remark：
The above information is for reference only. For detail please refer to The Hong Kong Mortgage Corporation Limited’s website or contact our bank staff.

Reminder: To borrow or not to borrow? Borrow only if you can repay!