Hong Kong’s Reverse Mortgage: Govt guarantees loan shortfall?

October 11, 2014

Hong Kong’s reverse mortgage

Further to our article “Reverse mortgage: Other countries also low take-up?” (Oct 5), let’s look at Hong Kong’s reverse mortgage scheme.

According to its web site

Govt guarantees loan shortfall?

– “If the sale proceeds from the property exceed the outstanding loan amount owed by borrowers, the bank will return the surplus to them (or their inheritors) after paying off such outstanding loan amount in full. However, if there is any shortfall, borrowers (or their inheritors) need not worry as the shortfall will be borne by the HKMC under an insurance arrangement between the bank and the HKMC.”

Govt does not profit?

– So, unlike our HDB Lease Buyback Scheme, the Hong Kong Government not only does not make any money, but guarantees any shortfall between the home’s market value and the loan, at the time of sale or death.

Stay lifetime?

Moreover, one gets to live in the home for life, instead of our 30 year lease.

S Y Lee and Leong Sze Hian

P.S. Come with your family and friends to the 5th Return Our CPF protest on 25 October 4 pm at Speakers’ Corner https://www.facebook.com/events/446619505476438/

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About the Author

Leong
Leong Sze Hian has served as the president of 4 professional bodies, honorary consul of 2 countries, an alumnus of Harvard University, authored 4 books, quoted over 1500 times in the media , has been a radio talkshow host, a newspaper daily columnist, Wharton Fellow, SEACeM Fellow, columnist for theonlinecitizen and Malaysiakini, executive producer of Ilo Ilo (40 international awards), Hotel Mumbai (associate producer), invited to speak more than 200 times in about 40 countries, CIFA advisory board member, founding advisor to the Financial Planning Associations of 2 countries. He has 3 Masters, 2 Bachelors degrees and 13 professional  qualifications.