HKMA reports decline in residential mortgages in negative equity at year-end
The Hong Kong Monetary Authority announced a significant decrease in residential mortgage loans in negative equity at the end of December 2025. The number of cases fell to 21,304 from 31,449 at end-September, with the aggregate value declining to HK$105.4 billion.
Negative equity cases and values decline
At the close of December 2025, the estimated number of residential mortgage loans (RMLs) in negative equity significantly decreased to 21,304 cases.
This marks a substantial reduction from the 31,449 cases recorded at the end of September 2025. The aggregate value of these RMLs also saw a notable decline, falling to HK$105.4 billion by year-end, a considerable improvement from HK$156.8 billion reported three months prior.
Furthermore, the unsecured portion of these loans decreased to HK$6.2 billion from HK$10.9 billion over the same period.
The Hong Kong Monetary Authority noted that these cases predominantly involve bank staff housing loans or RMLs covered by mortgage insurance programmes, which typically feature higher loan-to-value ratios.
This highlights the specific segments of the market primarily affected by negative equity.
Low delinquency amid specific definitions
The three-month delinquency ratio for RMLs in negative equity saw a slight increase to 0.31% at end-December 2025, up from 0.24% in September.
The Hong Kong Monetary Authority (HKMA) emphasized that this ratio remains at a low level, indicating contained risks.
The survey's figures specifically cover RMLs provided by authorized institutions as first mortgages, where the outstanding loan amount exceeds the current market value.
RMLs associated with co-financing schemes are excluded, as institutions do not track second mortgage balances.
The survey encompassed about 99% of the industry's total mortgage portfolios, with results extrapolated for the broader banking sector.