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The following is issued on behalf of the Hong Kong Monetary Authority:
The Hong Kong Mortgage Corporation Limited (HKMC) today (September 20) announced the introduction of three enhancements to the Reverse Mortgage Programme (RMP) to better meet the social needs. The enhancements are introduced having regard to suggestions from the public and will be implemented before the end of 2012 to offer greater flexibility and benefits to the users of the RMP. The enhancements are as follows:
(a) increasing the maximum specified property value for payout calculation from HK$8 million to HK$15 million so that borrowers with properties over HK$8 million can receive more payout (please refer to Annex A for details). For properties above HK$8 million, a discount of the property value would be applied to manage the risk of property price fluctuation;
(b) lowering the minimum age of borrowers from 60 to 55 (please refer to Annexes B and C for the relevant monthly payout tables) in response to requests from potential applicants below the age of 60, e.g. early retirees and couples with one spouse younger than 60. The lower entry age of 55 has made reference to some reverse mortgage schemes overseas, e.g. in Canada and the UK; and
(c) increasing the maximum lump-sum payout amount from 50% of the actuarial value of the reverse mortgage to 90% while retaining the existing requirement on the minimum lump-sum payout amount and the specific purposes for lump-sum payout, i.e. full repayment of the existing mortgage on the underlying property, major property repairs and maintenance, and medical expenses. For borrowers drawing a larger lump sum, there will be correspondingly a lowering of the monthly payout amount. If the borrowers withdraw the maximum amount of lump-sum payout, they will not receive any monthly payouts but they will be entitled to live in their property for the rest of their life. This enhancement is helpful to those looking for a larger lump-sum payout to meet immediate needs.
The Executive Director of the HKMC and Deputy Chief Executive of the Hong Kong Monetary Authority, Mr Peter Pang, said, "We are pleased that the RMP has been well received by the public since its inception in July 2011. With the introduction of the new enhancements later this year, the RMP will better serve the needs of the elderly and allow more elderly people to enjoy the benefits of reverse mortgage and better financial planning."
The above enhanced features are also available to existing borrowers under the RMP. For enquiries, please call the Reverse Mortgage Programme Hotline: 2536 0136.
Ends/Thursday, September 20, 2012
Issued at HKT 17:32
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