The Hong Kong Monetary Authority announced that as of September 2025, there were 31,449 residential mortgage loans ("RMLs") in negative equity, with an aggregate value of HK$156.8 billion. This represented a decrease from June 2025, when there were 37,806 such loans valued at HK$190.2 billion. The unsecured portion of these loans also decreased, and the three-month delinquency ratio remained low.
This article was generated using SAMS, an AI technology by Timothy Loh LLP.
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The Hong Kong Monetary Authority, in its latest report, disclosed (31 October) the findings of its comprehensive survey on residential mortgage loans ("RMLs") held in negative equity at the end of September 2025.
The survey revealed that 31,449 residential mortgage loans were in negative equity at end-September 2025, a reduction of 6,357 cases compared to the end of June 2025. These loans predominantly included bank staff housing loans or those under mortgage insurance programs with higher loan-to-value ratios.
The aggregate value of residential mortgage loans in negative equity dropped to HK$156.8 billion at the end of September 2025, a decrease of HK$33.4 billion since the end of June 2025. This reflects a substantial improvement in the overall mortgage health.
The unsecured portion of these loans decreased to HK$10.9 billion at the end of September 2025, from HK$14.3 billion at the end of June 2025, indicating a significant reduction in the unsecured debt load.
The three-month delinquency ratio of RMLs in negative equity remained low at 0.24% at the end of September 2025, a slight increase from 0.21% at the end of June 2025.
The survey's data covers only those RMLs provided by authorized institutions on the basis of first mortgages and known to be in negative equity. It excludes RMLs associated with co-financing schemes where the second mortgages could lead to negative equity if included. The extent of negative equity in such cases is not known.
The surveyed mortgage portfolios of authorized institutions represent approximately 99% of the banking sector's total. The findings have been extrapolated to estimate the broader position of the banking industry.
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