{"id":4934,"date":"2017-09-15T11:48:55","date_gmt":"2017-09-15T03:48:55","guid":{"rendered":"https:\/\/www.spacious.hk\/en\/blog\/?p=4934"},"modified":"2019-10-30T11:00:52","modified_gmt":"2019-10-30T03:00:52","slug":"159-news-roundup-home-buyers-getting-developer-loans-might-start-sweetly-end-bitterly-much-higher-interest-payment","status":"publish","type":"post","link":"https:\/\/www.spacious.hk\/en\/blog\/159-news-roundup-home-buyers-getting-developer-loans-might-start-sweetly-end-bitterly-much-higher-interest-payment","title":{"rendered":"15\/9 News Roundup: Home buyers getting developer loans might start ‘sweetly’, but end up ‘bitterly’ with a much higher interest payment"},"content":{"rendered":"

Spacious’ View:
\n<\/span><\/strong>Home buyers getting developer loans might start ‘sweetly’, but end up ‘bitterly’ with a much higher interest payment.
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Warning over high-interest developer loans<\/strong><\/p>\n

To push home sales, developers offer mortgage plans with high loan-to-value ratios to attract buyers who may not be able to get bank loans. But these, the Consumer Council warns, could cost buyers a few million dollars more when compared to traditional loans.<\/p>\n

Based on the loan limit of HK$5 million set by the Hong Kong Monetary Authority, a buyer has to make a down payment of HK$3.48 million if he or she has taken out mortgage plans with a bank.<\/p>\n

With an interest rate of prime minus 2.75%, the total interest will add up to some HK$1.54 million. The monthly installment will be about HK$21,000 for the whole 25 years. At the end, the buyer will be paying some HK$10 million in total for the flat.<\/p>\n

But if the buyer takes out a mortgage plan with the developer, he or she can get a higher loan-to-value ratio of 80% – or HK$6.78 million for the same flat – and make a down payment of HK$1.69 million.<\/p>\n

However, the interest rate is much higher with prime plus 1%. The total interest will be about HK$6.67 million, meaning the buyer will pay about HK$15 million in total – HK$5 million more than the bank plan.<\/p>\n

The watchdog also said it checked 69 mortgage plans provided by 17 banks and found that the total interest costs could differ by about HK$200,000 even when the plans are quite similar.<\/p>\n

Spacious’ free online mortgage calculator<\/a> allows buyers to calculate the cost of mortgage under different interest rates and loan terms for a better budget planning.<\/p>\n

La Cresta referencing from Mid-Levels home prices<\/strong><\/p>\n

In the primary market, HKR International and Nan Fung Group yesterday uploaded the first sales brochure for its La Cresta<\/a> residential project in Kau To Shan, with a spokeswoman saying they will take reference from flat prices in Mid-Levels<\/a>.<\/p>\n

In Kai Tak<\/a>, Wheelock Properties has reportedly received over 1,500 subscriptions for its Oasis Kai Tak<\/a> project. The developer will put the first batch of 130 units for sale today. Meanwhile, Poly Property launched yesterday a new price list from Vibe Centro<\/a> project in the same district. The new price list comprises 120 units with an average discounted price at HK$21,907 per square foot. These units might be launched for sale soonest next week.<\/p>\n

Click here<\/a> to see more new developments in Hong Kong on Spacious.<\/p>\n

For more information on property news and prices, please visit our website at https:\/\/www.spacious.hk\/<\/a> or follow our LinkedIn Page<\/a>.