Table of Contents
Insufficient or unstable income
- Debt repayment ratio (DSR) exceeds the limit: Hong Kong banks usually require monthly repayment amount ≤ income 50% (depending on property type and policy). If your income is not enough to cover twice the monthly payment, your application may be rejected.
- Insufficient proof of income: Self-employed individuals, freelancers or cash earners who cannot provide stable tax returns, company accounts or bank statements may be considered high risk.
- Probationary period or short-term work: Banks prefer long-term stable careers. If you have just changed jobs or are in the probationary period, it may affect the approval.
Bad credit score
- Low TransUnion (TU) credit score: Late payments, excessive use of credit cards, bankruptcy records, debt restructuring, etc. will lower the score.
- Excessive debt: Existing loans (such as personal loans, car loans) or debts guaranteed for others may cause the total debt ratio to exceed the limit.
Property valuation or type issues
- Inadequate bank valuation: If the property valuation is lower than the purchase price, the loan amount will be reduced, resulting in a down payment gap. For example:
- The purchase price is HK$10 million, the bank's valuation is HK$9 million, and the mortgage ratio is 60% → the maximum loan amount is HK$5.4 million, and the difference needs to be made up.
- High-risk properties: village houses, tenement buildings, buildings that are too old (e.g. over 50 years old), non-residential properties (shops, industrial buildings), etc. Some banks may refuse to approve or reduce the loan amount.
Unknown source of down payment funds
- Insufficient down payment: For example, for properties worth more than 10 million yuan, the upper limit of the mortgage amount is 50%. If the down payment is less than 50%, the loan will be directly rejected.
- The legality of funds is in doubt: If the down payment comes from a gift from a non-immediate relative, a short-term loan, or if clear proof of the source (such as bank statements) cannot be provided, the bank may suspect money laundering risks.
Failed the stress test
- Repayment ability under rising interest rates: Banks will simulate the DSR after the interest rate rises by 2-3% (usually required to be ≤60%). If your income is not covered, you may be rejected even if you meet the current conditions.
Policy or administrative factors
- Monetary Authority of Singapore mortgage restrictions: such as the property price grading system, additional stamp duty (BSD) for non-permanent residents, etc., may affect the amount.
- Missing or incorrect documents: For example, missing tax forms, employment contracts, proof of address, or proof of income that doesn’t match the actual situation.
Applicant Background Factors
- Older age: If you are approaching retirement age (e.g. over 55), you may need to shorten the repayment period or provide a guarantor.
- Non-permanent resident status: Some banks have stricter approval procedures for non-Hong Kong permanent residents, or require a higher down payment.
Other causes
- Applying for mortgages multiple times: Applying to multiple banks in a short period of time may trigger too many credit inquiries and affect your score.
- Disputes over property use: If the bank suspects that the property is used for purposes other than self-residence (such as rental or commercial purposes), it may adjust the ratio or reject the application.
Solution suggestions
- Improve your credit score: Pay down debt, reduce credit card usage, and check your TransUnion report regularly.
- Add a down payment or guarantor: Increase your down payment ratio or add a co-borrower with a stable income.
- Re-evaluate the property: Choose a younger property with a stable valuation, or negotiate a valuation with the bank.
- Provide additional proof: Self-employed individuals may submit a more detailed financial statement or proof of assets.
- Consult professionals: Find a suitable bank and solution through a mortgage broker or financial advisor.
If your application is rejected, it is recommended that you inquire directly with the bank about the specific reasons and reapply after making targeted improvements.
