Hong Kong Mortgage Corporation's insured mortgage drawdowns fall to HKD 15.5 bn in first half

Implications for lenders

For lenders in Hong Kong, guaranteed SME loans now rely on the 80% product, so credit review should price a larger retained loss share than under the expired 90% product. Mortgage lenders may use HKMC insurance data, with drawdowns at HKD 15.5 bn, as one indicator of demand for high loan-to-value lending.

Implications

Facts

The Hong Kong Mortgage Corporation (HKMC) published its interim results for the first half of 2026 on 26 October 2026 via the HKMA.

Under the Mortgage Insurance Programme, which insures banks' higher loan-to-value mortgages, new loans drawn down were HKD 15.5 bn, HKD 17.5 bn in 1H 2025. ¹ Of these, 73% were secured on secondary-market properties. HKMC acquired HKD 2.9 bn of loan assets (HKD 2.7 bn in 1H 2025), and its outstanding loan portfolio was HKD 74.1 bn at end-June (HKD 78.6 bn at end-2025). ²

On funding, HKMC issued HKD 24.8 bn of corporate debt (HKD 23.3 bn in 1H 2025) and reported its inaugural digital bonds of about HKD 12 bn equivalent in three HKD and CNH tranches; the release does not say whether they are part of the half-year total. ³ Its capital adequacy ratio was 18.6% (18.1% at end-2025; minimum 8%).

For SMEs, the SME Financing Guarantee Scheme product with 80% cover has approved about HKD 129.6 bn of loans, over 30,400 applications approved since 2012, and its application period has been extended to end-March 2028. ⁴ The product with 90% cover expired at end-March 2026. Reverse mortgage approvals were 484 (488 in 1H 2025).

Analysis

Insured drawdowns fell while bank mortgage approvals were strong. In the HKMA's monthly survey, new mortgage loans approved rose from HKD 32.5 bn in January to HKD 50.6 bn in June. ⁵ Lower use of mortgage insurance in a rising approval market suggests a smaller share of new lending needed high loan-to-value cover in the half-year, although the release does not break down the reasons.

The SME picture shifts risk back to lenders: with the 90% product closed, new guaranteed SME loans rely on the 80% product, so banks retain a larger unguaranteed share of each loan. The digital bond issue adds a new funding format alongside HKMC's conventional debt.

Counterpoints and uncertainties

Half-year figures can shift with property-market cycles, and the release gives no split of insured loans by loan-to-value band or borrower income. The extension of the SME product to 2028 could be revised, and bank mortgage approvals in August fell to HKD 32.2 bn, so second-half demand for insured lending is uncertain.