(a) Determine the minimum monthly salary income requirement under stress test for the following mortgage loans applicati

[answerhappygod]

A Determine The Minimum Monthly Salary Income Requirement Under Stress Test For The Following Mortgage Loans Applicati 1 (82.13 KiB) Viewed 57 times

(a) Determine the minimum monthly salary income requirement under stress test for the following mortgage loans application case, if the applicants want to borrow the maximum possible amount: - Applicants: A couple, both are Hong Kong citizens, with salaries derived from Hong Kong - Property value: HK$9.8 million - Purpose: to acquire the second residential property for renting out - Rental income from the property: $24,000 per month, with rental income proof (rental income should be discounted by 30% in DSR evaluation) - The applicable interest rate for this instalment loan: 2.3%p.a. - Applicants' first self-use residential property monthly installment payment is $20,400 - The intended repayment schedule of this second residential property: by monthly installments for 25 years. Monthly instalment payment can be solved by using a financial calculator or the following formula: r(1+r)" A = P. (1+r)n-1 , where A is the monthly instalment payment. The relevant latest supervisory measures on property mortgage issued by Hong Kong Monetary Authority (HKMA) are listed below:
The relevant latest supervisory measures on property mortgage issued by Hong Kong Monetary Authority (HKMA) are listed below: Loan-to-value Ratio (LTV) caps and Debt Servicing Ratio (DSR) limits for property mortgage loans with effect from 20 August 2020 Table 1: LTV caps in HK " Property value Residential properties Commercial and industrial Self-use Non-self-use or company held properties, and car parks Applicants whose income Applicants whose income Applicants whose income is mainly derived is mainly derived is mainly derived in HK from outside of from outside of in HK from outside of HK ! HK HK Applicants who have not borrowed or guaranteed other outstanding mortgage(s) at the time of making a mortgage application? DSR-based lending 60% 50% < <HKSIO million subject to a loan cap subject to a loan cap of HKS5 million of HK S4 million) 50% 40% 50% 40% HK$10 million 50% 40% Net worth-based lending Regardless of value 40% Applicants who have borrowed or guaranteed other outstanding mortgage(s) at the time of making a mortgage application DSR-based lending 50% 40% <HK$10 million (subject to a loan cap (subject to a loan cap of HKS4 million) of HKS3 million) ) % 40% 30% 40% 30% 2 HK$10 million 40% 30% Net worth-based lending Regardless of value 30% 30% 40% Lean-to-value Ratio (LTV) caps and Debt Servicing Ratio (DSR) limits for property mortgage loans with effect from 20 August 2020 Table 2: DSR limits Residential, commercial and industrial properties, and car parks Self-use 14 Non-self-use Applicants' income mainly derived Applicants' income mainly derived in HK from outside of HK! in HK from outside of HK! Applicants who have not borrowed or guaranteed other outstanding mortgage(s) at the time of making a mortgage application Base DSR limit 50% 40% 40% 30% Stressed DSR limit 60% 50% % (assuming a 300-basis point hike in interest rate) 50% 40% Applicants who have borrowed or guaranteed other outstanding mortgage(s) at the time of making a mortgage application Base DSR limit 40% 30% 40% 30 Stressed DSR limit 50% 40% 50% 40% (assuming a 300-basis point hike in interest rate) %