***********************************************************
The following is issued on behalf of the Hong Kong Monetary Authority :
The Hong Kong Mortgage Corporation Limited (HKMC) is pleased to announce today (August 22) the introduction of a new mortgage product with a 75% loan-to-value ratio (LTV) and enhancements of Risk-based Pricing Scheme (RBPS) and Loyalty Discount Scheme (LDS) under the Mortgage Insurance Programme (MIP).
Over the years, the Corporation has adopted a proactive and prudent approach to expand the eligibility criteria and product range of the MIP to meet the requirements of banks and homebuyers alike. The 75% LTV product is expected to attract borrowers who would wish to borrow marginally higher than 70% LTV. Its attractiveness lies in the lower premium levels compared to the higher LTV products. The revised insurance premium rate levels are set out in Annex A.
On the other hand, the RBPS and LDS schemes launched in May 2006 have received very good responses from the banks and the homebuyers. With the continued enhancement of the in-house Credit Scoring Model, it is now possible to attain an expansion in the scope of the schemes. For the RBPS, the maximum premium discount for a loan with LTV up to 85% will be increased from 20% to 25% of the gross premium. The arrangement will also be extended to 90% LTV product with a maximum discount of 15%. With regard to the LDS, for repeated MIP users with previous MIP loan(s) maintained for an aggregate of over three years with punctual repayment record, the maximum premium discount will be enhanced from 15% to 20%. Details of the enhancements are set out in Annex B.
Mr James H Lau, Chief Executive Officer of the HKMC, said "the introduction of these new initiatives will help to make the range of products under the MIP more complete. It will also help to attain a better differentiation in the credit quality of the borrowers to the benefit of the market as a whole."
The HKMC has briefed the MIP participating banks of the details of these new initiatives. Both the 75% LTV product and the enhanced premium discount arrangement will apply to MIP applications drawdown on or after August 29, 2007. Interested homebuyers can call up the HKMC hotline at 2536-0136 or contact any participating bank listed in Annex C for further information.
Ends/Wednesday, August 22, 2007
Issued at HKT 18:16
NNNN