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Hong Kong negative-equity mortgages fall to 3,819; delinquency among them rises to 1.34%

Published Data as of Hong KongCredit
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Key points

Implications for lenders

Lenders with high loan-to-value mortgage products, such as insured or staff loans, may see arrears concentrate in that segment: the delinquency ratio of negative-equity loans is 1.34% against 0.11% for all surveyed mortgages. Credit reviews of second-charge or top-up lending can check whether a borrower's first mortgage is close to negative equity, since the unsecured shortfall of HKD 0.8 bn sits with a small group of borrowers.

Implications

ExecutivesBanks' mortgage collateral cover has improved broadly, but the remaining negative-equity pool is concentrated in high loan-to-value products and shows more arrears.
InvestorsA smaller negative-equity pool reduces potential loss severity in mortgage books; the rising ratio within it is a small-base signal, not a system-wide trend.
OperatorsCollections teams can focus on the remaining high loan-to-value cases of the pool, where arrears are concentrated.

Facts

The Hong Kong Monetary Authority (HKMA) published its quarterly estimate of residential mortgage loans in negative equity on 30 October 2026. It estimates 3,819 such loans at end-September 2026, down 12.3% from 4,356 at end-June 2026. 1 The HKMA says the remaining cases are mainly bank staff housing loans or loans under the mortgage insurance programme, which generally carry higher loan-to-value ratios.

The aggregate value of these loans was HKD 17.3 bn, down from HKD 19.6 bn at end-June 2026. 2 The unsecured portion, the part of the balances above the current value of the properties, was HKD 0.8 bn, down from HKD 0.9 bn at end-June 2026. 3 The three-month delinquency ratio of the loans was 1.34%, up from 1.25% at end-June 2026. 4

The estimate covers only first mortgages provided by authorized institutions that are known to exceed the property's current market value; loans under co-financing schemes that would be in negative equity if second mortgages were counted are excluded.

Analysis

The count has fallen in every quarter shown in the chart. It was 31,449 at end-September 2025 5 and 4,356 at end-June 2026 (down 61.9% from 11,424 at end-March 2026). 6 The decline slowed in the third quarter, after the large fall in the second.

The delinquency ratio moved the other way. It was 0.24% a year earlier 7 and is now 1.34%. The HKMA attributed the rise in the second quarter to the value of negative-equity loans falling faster than the value of delinquent ones among them: as borrowers whose properties regained value leave the pool, those still in arrears make up a larger share of a smaller group. For comparison, the delinquency ratio for all mortgages in the HKMA's monthly survey was 0.11% in September. 8

Residential mortgages in negative equity (cases)
010000200003000040000378062025Q2314492025Q3213042025Q4114242026Q143562026Q238192026Q3
Residential mortgages in negative equity (cases)
2025Q237806
2025Q331449
2025Q421304
2026Q111424
2026Q24356
2026Q33819

Estimated number of residential mortgage loans in negative equity at quarter-end (HKMA survey) · Source: HKMA: Residential mortgage loans in negative equity (quarterly press releases) (2025Q2, 2025Q3, 2025Q4, 2026Q1, 2026Q2, 2026Q3) First mortgages only; co-financing-scheme loans excluded.

Counterpoints and uncertainties

The ratio is calculated on a pool that has shrunk sharply, so small changes in the number of delinquent loans move it substantially. The survey excludes co-financing-scheme loans and second mortgages, so negative equity across all property borrowing may be higher than the headline count. A renewed fall in property prices would push loans back into negative equity.

Key figures

  1. Residential mortgages in negative equity (end-Sep 2026): 3,819 (down 12.3% from 4,356 at end-June 2026)
    Covers only first mortgages known to exceed the property's current market value; co-financing-scheme loans that would be in negative equity if second mortgages were counted are excluded.
    . Estimated number of residential mortgage loans in negative equity (HKMA quarterly survey). Authorized institutions' first residential mortgages (survey covering about 99% of the industry, extrapolated). Basis date: 30 Sep 2026. Source: HKMA (2026-10-30): Residential mortgage loans in negative equity: End of September 2026
  2. Value of mortgages in negative equity (end-Sep 2026): HKD 17.3 bn (down from HKD 19.6 bn at end-June 2026)
    Covers only first mortgages known to exceed the property's current market value; co-financing-scheme loans that would be in negative equity if second mortgages were counted are excluded.
    . Aggregate value of residential mortgage loans in negative equity. Authorized institutions' first residential mortgages (survey covering about 99% of the industry, extrapolated). Basis date: 30 Sep 2026. Source: HKMA (2026-10-30): Residential mortgage loans in negative equity: End of September 2026
  3. Unsecured portion of negative-equity mortgages (end-Sep 2026): HKD 0.8 bn (down from HKD 0.9 bn at end-June 2026)
    Covers only first mortgages known to exceed the property's current market value; co-financing-scheme loans that would be in negative equity if second mortgages were counted are excluded.
    . Part of negative-equity mortgage balances exceeding the current value of the property. Authorized institutions' first residential mortgages (survey covering about 99% of the industry, extrapolated). Basis date: 30 Sep 2026. Source: HKMA (2026-10-30): Residential mortgage loans in negative equity: End of September 2026
  4. Delinquency ratio of negative-equity mortgages (end-Sep 2026): 1.34% (up from 1.25% at end-June 2026)
    Covers only first mortgages known to exceed the property's current market value; co-financing-scheme loans that would be in negative equity if second mortgages were counted are excluded.
    . Three-month delinquency ratio of residential mortgage loans in negative equity. Authorized institutions' first residential mortgages (survey covering about 99% of the industry, extrapolated). Basis date: 30 Sep 2026. Source: HKMA (2026-10-30): Residential mortgage loans in negative equity: End of September 2026
  5. Residential mortgages in negative equity (end-Sep 2025): 31,449 (down from 37,806 at end-June 2025)
    Covers only first mortgages known to exceed the property's current market value; co-financing-scheme loans that would be in negative equity if second mortgages were counted are excluded.
    . Estimated number of residential mortgage loans in negative equity (HKMA quarterly survey). Authorized institutions' first residential mortgages (survey covering about 99% of the industry, extrapolated). Basis date: 30 Sep 2025. Source: HKMA (2025-10-31): Residential mortgage loans in negative equity: End of September 2025
  6. Residential mortgages in negative equity (end-Jun 2026): 4,356 (down 61.9% from 11,424 at end-March 2026)
    Covers only first mortgages known to exceed the property's current market value; co-financing-scheme loans that would be in negative equity if second mortgages were counted are excluded.
    . Estimated number of residential mortgage loans in negative equity (HKMA quarterly survey). Authorized institutions' first residential mortgages (survey covering about 99% of the industry, extrapolated). Basis date: 30 Jun 2026. Source: HKMA (2026-07-31): Residential mortgage loans in negative equity: End of June 2026
  7. Delinquency ratio of negative-equity mortgages (end-Sep 2025): 0.24% (up from 0.21% at end-June 2025)
    Covers only first mortgages known to exceed the property's current market value; co-financing-scheme loans that would be in negative equity if second mortgages were counted are excluded.
    . Three-month delinquency ratio of residential mortgage loans in negative equity. Authorized institutions' first residential mortgages (survey covering about 99% of the industry, extrapolated). Basis date: 30 Sep 2025. Source: HKMA (2025-10-31): Residential mortgage loans in negative equity: End of September 2025
  8. Mortgage delinquency ratio (end-September 2026): 0.11% (unchanged from end-August 2026). Mortgage delinquency ratio as published in the HKMA residential mortgage survey. Authorized institutions in the HKMA residential mortgage survey. Basis date: 30 Sep 2026. Source: HKMA (2026-10-30): Residential Mortgage Survey Results for September 2026

Sources

  1. HKMA (2026-10-30): Residential mortgage loans in negative equity: End of September 2026primary
  2. HKMA (2026-07-31): Residential mortgage loans in negative equity: End of June 2026primary
  3. HKMA (2026-04-30): Residential mortgage loans in negative equity: End of March 2026primary
  4. HKMA (2026-01-30): Residential mortgage loans in negative equity: End of December 2025primary
  5. HKMA (2025-10-31): Residential mortgage loans in negative equity: End of September 2025primary
  6. HKMA (2026-10-30): Residential Mortgage Survey Results for September 2026primary
  7. The Standard (2026-10-30): Number of residential mortgages in negative equity falls 12pc in September: HKMA
  8. Dimsum Daily (2026-10-30): HKMA reports fewer negative equity mortgages
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A Japanese version of this article is available: 日本語版

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