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The following is issued on behalf of the Hong Kong Monetary Authority:
The Hong Kong Mortgage Corporation Limited (HKMC) announced today (February 24) certain enhancements to the Reverse Mortgage Pilot Scheme being developed by the Corporation. These enhancements are outlined below:
i. A single borrower applying for reverse mortgage will receive a higher monthly annuity than two joint borrowers (around HK$200 to HK$500 more a month per HK$1 million of property value). Details are in Annex A.
ii. Borrowers can make a lump-sum withdrawal of their annuity to meet certain specific expenditures, with consequential downward adjustment to the monthly annuity level. Details are in Annex B.
iii. A six-month rescission period is provided. If a borrower terminates and repays the reverse mortgage within the rescission period, the insurance premium will be waived.
iv. The fees and charges associated with reverse mortgage application, e.g. for pre-sale counselling and property valuation, will be reduced where possible.
The Executive Director of the HKMC, Mr Peter Pang, said, "Given the ageing population, post-retirement financial planning is becoming more important. The Reverse Mortgage Pilot Scheme can provide one more alternative for the elderly to opt to receive a steady cash flow to improve their quality of life while staying in their own homes during their life time. We will proactively discuss with banks to finalise the details and launch the scheme in mid-2011."
More details of the scheme are set out at Annex C.
Ends/Thursday, February 24, 2011
Issued at HKT 17:15
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