Core Viewpoint - The mortgage insurance market in Hong Kong is experiencing a significant decline in both the number of new applications and the total amount, reaching levels not seen in over seven years, primarily due to relaxed mortgage policies and changing buyer demographics [1][2]. Group 1: Mortgage Insurance Application Trends - In January 2026, the number of new mortgage insurance applications decreased by 8.7% month-on-month to 460, marking a new low since November 2018 [1] - The total amount of new mortgage insurance also fell by 7.1% to HKD 2.36 billion [1] - Although new mortgage insurance approvals increased by 5.8% month-on-month to 1,100, they remain at a seven-year low, with the total amount rising by 7% to HKD 5.94 billion, which is still at a six-and-a-half-year low [1] Group 2: Year-on-Year Comparisons - Compared to January 2025, the number of new mortgage insurance applications in January 2026 decreased by 11%, and the total amount decreased by 9% [1] - New mortgage insurance approvals and amounts also saw year-on-year declines of 14.1% and 10.9%, respectively [1] Group 3: Market Dynamics - The decline in mortgage insurance applications is attributed to the comprehensive relaxation of mortgage ratios, reducing the demand for high-ratio mortgage insurance among homebuyers [1] - An increase in the proportion of investors entering the market, who typically do not require mortgage insurance, has further contributed to the low levels of mortgage insurance applications [1][2] - The usage ratio of mortgage insurance has dropped to 12.1% as of December 2025, down from over 30% prior to the policy relaxation, marking the lowest level since November 2019 [2]

Core Insights - The mortgage insurance market in Hong Kong is experiencing a significant decline in both the number of new applications and the total amount insured, attributed to a decrease in demand for high loan-to-value (LTV) mortgage insurance as LTV ratios have been relaxed [1][2] Group 1: Mortgage Insurance Trends - In November 2025, the number of new mortgage insurance applications fell by 10.1% month-on-month to 560, with the total amount decreasing by 9.9% to HKD 2.8 billion [1] - The number of new mortgage insurance applications for the same period dropped by 8.6% month-on-month to 1,068, marking the lowest level in over seven years, with the total amount down 6.7% to HKD 5.6 billion [1] - The overall mortgage insurance usage ratio has decreased from over 30% before the policy relaxation to an average of about 15% this year [1] Group 2: Market Dynamics - The overall property market showed improved transaction activity in the fourth quarter, but the usage of mortgage insurance remains low [1] - The increase in the proportion of investment buyers, who typically do not require high LTV mortgage insurance, has contributed to the low penetration rate of mortgage insurance in the overall mortgage market [1] - For the first 11 months of 2025, new mortgage insurance applications totaled 6,594, a decline of 25.2% compared to the same period in 2024, with the total amount insured at HKD 32.7 billion, down 27.7% year-on-year [2]