What documents are required when applying for HSBC mortgage?

To apply for HSBC mortgage, proof of identity, provisional agreement for sale and purchase (applicable to new purchase)/ recent 3-month repayment record, current mortgage repayment information, proof of residential address (applicable to refinance), recent 3-month salary record, bank statement and recent tax bill are required.

What is building order? Does HSBC impose any restriction on the property with building order?

When a property is found to have unauthorized building works by the Housing Department, a building order will be issued, which demands the property owner to get it removed in a given time frame. HSBC will not provide mortgages for properties with building order.

Can I apply for a mortgage without a fixed income? Can I apply with my asset instead?

In general, self-employed applicants are required to provide 6-month of bank statement as income proof. Applicants can also apply through Asset Based Lending using properties, cash, stocks, bonds, etc but not certain.

Can I apply for a pre-approved mortgage?

Most Banks including HSBC do not accept pre-approved mortgage applications.

Can I apply for a mortgage without a tax bill?

HSBC does not accept mortgage application without a tax bill. Applicants can consider applying through Asset Based Lending (ABL) if he/ she has more assets.

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HSBC Mortgage Plans

HSBC mortgage plans have always been popular among prospective and exisitng homeowners because, for one thing, Its interest rates follow the market trend of the market and for another, it offers deposit-linked mortgages which offset your mortgage interest with better rates on your savings, resulting in a lower net interest expenses.

HSBC New Buy Rate Plan

New Buy Rate Plan	Rate	Interest Rate Cap	Applicable Property Types
New Buy Rate PlanHSBC 1 Month HIBOR	RateH+1.38%	Interest Rate CapP(5.0%)-2.5%	Applicable Property Types All property types apart from public housing and HOS Scheme
New Buy Rate PlanHSBC Prime Rate	RateP(5.0%)-2.5%	Interest Rate Cap5.0%	Applicable Property TypesPublic Housing and HOS Scheme

HSBC Refinance Rate Plan

Refinance Rate Plan	Rate	Interest Rate Cap	Applicable Property Types
Refinance Rate Plan HSBC 1 Month HIBOR	RateH+1.5%	Interest Rate CapP(5.0%)-2.5%	Applicable Property TypesAll property types apart from public housing and HOS Scheme
Refinance Rate PlanHSBC Prime Rate	RateP(5.0%)-2.5%	Interest Rate Cap5.0%	Applicable Property TypesPublic Housing and HOS Scheme

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HSBC Mortgage Plan: Advantages

HSBC offers a wide array of mortgage plans catered for the varying needs of customers such as P Plan and H Plan for both first-time mortgages and remortgages. H plan offers a good rate when the interest rate is low and it comes with a cap limit ensuring a rate protection in case of fluctuations. The current interest rate is at H+1.38% and the cap is P-2.5% with max. 1.5％ rebate.

HSBC Mortgage Plan: Disadvantages

HSBC only accept valuations from Debenham Thouard Zadelhoff (DTZ), so the valuation tends to be reserved. Moreover, the amount of money you can put in the deposit-linked account will decrease with time as you pay off your debt.

Mortgage Term with HSBC

Mortgage applications are affected by a number of factors:

Mortgage Term＝The maximum age a mortgage must be paid off - applicant age. HSBC age limit (i.e. the maximum age a mortgage must be paid off): 75 years old. HSBC maximum mortgage term: 30 years.

Example 1: Borrower is 51 years old. 75 - 51 ＝ 24. Therefore, the longest mortgage term, in this case, is 24 years.
Example 2: Borrower is 43 years old. 75 - 43 ＝ 32. To comply with the HSBC maximum mortgage term, the longest mortgage term, in this case, is 30 years.

Mortgage term= 75- property age HSBC Maximum Mortgage Term= 30 years. Example: Borrower is 50 years old and the property age is 52 years old. The final mortgage term is 23 years instead of 25 years using the 75- property age formula.

Property Valuation with HSBC

Most of the banks do not have their own valuation department. They usually use the valuation service by a third party company like DTZ, CBRE, Savills,and Centaline Property Agency etc. to provide valuation services. HSBC only accepts valuation service from Debenham Thouard Zadelhoff (DTZ), therefore their valuation tends to be reserved.

Online Valuation Service

Online Valuation Service doesn’t cover all properties in Hong Kong and the valuation tends to be more reserved. MoneySmart suggests considering valuation from a number of banks or using MoneySmart Property Valuation Calculator.

Property valuation is an important part of the entire mortgage application process. It does not only affect new purchases but also refinance mortgages. Numerous specific factors relating to the building will be looked at for example house prices of recent sales in the area, sales transactions, age, quality, unauthorised building works and building orders (if any). Village houses, old buildings and single private residential buildings usually have a low number of sales transactions, resulting in a low mortgage valuation.

For properties with a lower than expected valuation, MoneySmart suggests:

1

Requesting bankers to get valuations from few more companies. However they may refuse your request. Alternatively, you can apply through MoneySmart. We work with all major mortgage lenders. We can help you to compare, choose and apply for the best mortgage with a higher valuation.

2

For refinance mortgage, you can directly commission a company for property valuation and submit the valuation report to the bank directly. This approach suits under-valued properties like village houses and old buildings. It may double the valuation price. However, not all banks accept reports like this. It is best to check in advance.

Can these properties get a HSBC mortgage?

Property Type	Y/N	Remarks
Property TypeOff Plan Property	Y/NY	RemarksLess than 6 Million: 80% LTV 6 -10 Million : 60% LTV or 5 Million (whichever is less) 10 Million or above: 50% LTV
Property TypeFirst hand Property	Y/NY	RemarksLess than 10 Million: 80-90% LTV, depending on mortgage amount 10 Million or above: 50% LTV
Property TypeSecond hand Private Housing	Y/NY	RemarksLess than 10 Million: 80-90% LTV, depending on mortgage amount 10 Million or above: 50% LTV
Property TypeVillage Housing	Y/NY	RemarksLess than 10 Million: 85% LTV, depending on mortgage amount 10 Million or above: 50% LTV Period: 25 Years
Property TypeTong Lau	Y/NY	RemarksLess than 10 Million: 85% LTV, depending on mortgage amount 10 Million or above: 50% LTV
Property TypeHome Ownership Scheme Housing	Y/NY	RemarksPrime Rate Plans only. Land Premium unpaid: loan amount up to 90% of property price (white form) or 95% (green form) Land Premium paid: cases treated as 2nd hand private property Maximum loan period: 25 years
Property TypePublic Housing	Y/NY	RemarksPrime Rate Plans only. Loan amount: Up to 100% of property price (non inclusive of deposit paid to Housing Authority) Maximum loan period: 25 years

Paying for HSBC Mortgage

HSBC offers two mortgage repayment plans to suit your needs. You can either own your home sooner to save on interest, or repay less in the earlier years. You can also repay fortnightly or monthly with either straight-line repayment (i.e. repaying fixed repayment amounts over the entire term of the loan) or step-up repayment (i.e. shortening the overall loan period by gradually increasing the repayment amounts at a fixed step-up rate).

Can I apply for a mortgage only by rental income?

Yes. But not all rental income will be counted as monthly regular income. Please see below for details:

Percentage of rental income calculated as monthly regular income.

Lease with stamping: 70%
Lease without stamping: 60%

For example: If the monthly income of the applicant is HK$20,000 and his/ her monthly rental income (lease with stamping provided). His monthly income will be HK$20,000 + HK$10,000 X 70%, which is HK$27,000.

Should you pay off your mortgage early?

Early mortgage repayment

There are two types of early mortgage repayment. The first one is to pay off the debt completely and the property will become yours. The second one is to pay back the capital to save on some interests. No matter which one you choose, you may be subject to early mortgage repayment fees. In recent years, some banks have shortened the penalty period to half a year or a year. If a borrower decides to repay the debt within the penalty period, a higher early mortgage repayment fees/ interest rates will be incurred. If it is beyond the penalty period, the fees will be a lot less. In the first year of the penalty period, the penalty is 1%+cash rebate and in the second year, the penalty is all cash rebate. MoneySmart suggests negotiating the best penalty period terms before accepting the mortgage plan.

How to apply for your HSBC Home Loan

Step 1

Get in touch with our mortgage team

Applicants can contact our professional mortgage team though our website WhatsApp +852 9665 5218

Step 2

Compare HSBC mortgage plans

MoneySmart will follow up on your inquiry and provide different mortgage plans

Step 3

Apply online with required documents

Fill in a consolidated application form with MoneySmart to apply for a mortgage with different banks. 👍🏻

Step 4

Check the application form and sign it

The bank that you have applied for will contact you directly 📞to collect the necessary documents. Applicants can get in touch with the mortgage department directly for future inquiries.

Step 5

Draw down your mortgage

We will remind ⏰ you upon successful application and provide you with suggestions and assistance you may need until you have successfully got the mortgage.

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