Reverse mortgage borrowers will have more flexibility under Hong Kong Mortgage Corporation’s (HKMC) newly updated program.
Under the new changes, consumers will receive a discount in computing specified home values for properties worth over HK$8 million ($1 million). For existing borrowers with values over HK$10 million ($1.3 million), they may choose to receive a higher monthly payout.
These changes arrive two months after previous revision to HKMC’s reverse mortgage program. Since launching a reverse mortgage program in 2011, HKMC has increased its maximum property value payout from HK$8 million to HK$ 15 million ($1.9 million) and lowered the minimum age of borrowers from 60 to 55 to accommodate early retirees and couples with one spouse who is younger than 60 years old.
HKMC noted that its maximum lump-sum payment amount has also increased, and there will be a lowering of the monthly payout amount to correspond with borrowers withdrawing larger lump sums.
Under HKMC’s program, borrowers who choose to withdraw the maximum lump-sum payout amount and forgo monthly the payouts will still be entitled to live in their property for the remainder of their lives.
HKMC hopes that these enhancements to their current reverse mortgage program will bring greater flexibility and benefits to both current and prospective mortgage borrowers.
Written by Jason Oliva