[Mortgage Hotline] Increasing the cash rebate will prevent you from losing your budget?
Wenwei  2021-04-01  Transaction 

Cao Deming, Chief Vice President of Meridian Mortgage Referral

The epidemic affected Hong Kong’s economy last year. Banks, in response to changes in their risk appetite and high funding costs for mortgage business, spontaneously strengthened risk management, and mortgage approval criteria have also become more prudent. In addition to fine-tuning mortgage interest rates and reducing cash rebates and other mortgage-related offers, banks will also adjust mortgage terms in consideration of the industry stability of mortgage applicants.

Recently, the housing market has continued to be buoyant, and banks have become more active in mortgage business. Some banks may slightly increase relevant mortgage offers for individual high-quality customers. According to the latest data from the Land Registry, the market share of small and medium-sized banks has risen for two consecutive months. It is believed that individual banks have adjusted their mortgage interest rates in order to grab more market share in the second half of the year.

Buyers may need to "pay money" to attend the meeting first

In recent years, when home buyers choose mortgage products, in addition to the mortgage interest rate, the cash rebate provided by the bank is also one of the considerations. In fact, the bank mortgage cash rebate fell below 0.5% last year, and it has now been slightly adjusted back to the highest 1.2%. The cash rebate has increased, which is a pleasure for buyers. However, for novice buyers who have taken care of everything, they should pay attention to the fact that cash rebates of more than 1% may increase additional initial expenses, and you need to "carry money" first. "In the meeting.

In fact, the HKMA has clear guidelines for authorized institutions for residential mortgage loans, and banks provide the highest level of cash rebates to borrowers. If the cash rebate provided exceeds 1% of the loan amount, the entire rebate amount must be included in the loan amount when the bank approves the mortgage ratio.

Take a unit with a property price of 6 million yuan as an example. If 90% of the mortgage is acquired, the loan amount is 5.4 million yuan, while the bank can only acquire 60% of the mortgage, but after purchasing mortgage insurance, it can acquire 90% of the mortgage. . In terms of cash rebate, banks will only calculate 60% of the mortgage. If the cash rebate is 1%, the calculation method is 6 million yuan × 60% × 1% = 36,000 yuan. But if the cash rebate increases to 1.2%, the calculation method is 6 million yuan × 60% × 1.2% = 43,200 yuan. It should be noted that since the cash rebate exceeds 1% of the loan amount, the amount must be included in the calculation of the loan amount. Therefore, the bank calculates the loan amount as 5.4 million yuan-43,200 yuan = 5,356,800 yuan. Immediately, the applicant’s first installment will be increased from 600,000 yuan to 643,200 yuan (600,000 yuan + 43,200 yuan). After the property purchase and sale procedures are completed, the bank can pay the cash rebate to the borrower. Therefore, for buyers with tight funds for the first installment, they must calculate the required budget beforehand, and be careful not to increase or decrease due to the increase and decrease. Sufficient funds should be reserved to deal with the opportunity to pay for the increase in the first installment.

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