HKMA: Negative-equity residential mortgage loans fell to HK$17.3 billion at the end of the third quarter.

On 30 October, the Hong Kong Monetary Authority published the latest survey results on negative-equity residential mortgage loans for the end of the third quarter of 2026. The number of negative-equity residential mortgage loans was 3,819 at the end of the third quarter of 2026, compared with 4,356 at the end of the second quarter of 2026. These cases mainly involved housing mortgage loans for bank staff or loans under the Mortgage Insurance Programme, for which the loan-to-value ratios are generally higher. The amount of negative-equity residential mortgage loans decreased from HK$19.6 billion at the end of the second quarter of 2026 to HK$17.3 billion at the end of the third quarter of 2026. The unsecured portion of negative-equity residential mortgage loans decreased from HK$900 million at the end of the second quarter of 2026 to HK$800 million at the end of the third quarter of 2026. As the amount of negative-equity residential mortgage loans fell by more than the amount of delinquent negative-equity residential mortgage loans, the ratio of negative-equity residential mortgage loans delinquent for more than three months rose from 1.25% at the end of the second quarter of 2026 to 1.34% at the end of the third quarter of 2026. It must be noted that the figures from this survey only cover first mortgages provided by banks that are known to be in negative equity (i.e. the outstanding loan amount owed to the surveyed institution exceeds the current market value of the mortgaged property), and do not include residential mortgage loans involving second mortgages that would be classified as negative-equity loans when taken together with the second mortgage. As banks do not have information on customers' outstanding loans under second mortgages, it is not possible to know how many of these are negative-equity loans. The mortgage loans of the surveyed authorized institutions account for about 99% of the total mortgage loans of the entire banking system. The survey results are extrapolated to estimate the negative-equity mortgage loan situation of the entire banking system.