Budget Speech

Reverse Mortgage

148.      The HKMC announced in December 2010 its plan to launch a reverse mortgage pilot scheme in which elderly people will be able to use their properties as collateral to borrow mortgage loans from banks and receive a certain amount of cash every month while continuing to live in their properties for the rest of their lives.

149.      After the HKMC announced its plan, many people have expressed their support but also suggested ways to improve the plan. The HKMC has agreed to fine-tune the scheme. For example, borrowers will be allowed to draw in advance a certain amount of loans from banks in case of special needs to pay for medical expenses, building maintenance fees, etc. The amount of annuity payable to single borrowers will be raised while the fees for joining the scheme will be lowered or waived as far as possible. These changes are made to better meet the needs of the elderly, providing them with an alternative to improve their standard of living. Details of the scheme will be announced by the HKMC shortly.

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