Negative-equity mortgages fall to 3,819 as delinquency ratio rises
Hong Kong residential mortgages in negative equity fell to 3,819 at end-September 2026 from 4,356 at end-June, the Hong Kong Monetary Authority (HKMA) reported. Their value declined to HK$17.3 billion, while the delinquency ratio rose.
Fewer cases, higher delinquency ratio
At end-September 2026, negative-equity residential mortgage balances totaled HK$17.3 billion, down from HK$19.6 billion at end-June 2026.
The unsecured portion decreased to HK$0.8 billion from HK$0.9 billion.
The three-month delinquency ratio rose to 1.34 percent from 1.25 percent because total negative-equity mortgage balances declined faster than delinquent balances within that pool.
The higher ratio therefore accompanied a decline in delinquent balances, rather than an increase.
Cases mainly involved bank staff housing loans or loans under the mortgage insurance programme, which generally carry higher loan-to-value ratios.
The HKMA reported the survey results on October 30, 2026.
First mortgages define the boundary
The survey covers first mortgages from authorized institutions that know the outstanding loan exceeds the property's current market value.
It excludes co-financing loans that would be in negative equity after including second mortgages.
Their negative-equity position is unknown because institutions do not record outstanding second-mortgage balances.
Surveyed institutions account for about 99 percent of industry mortgage portfolios; the HKMA extrapolates their results to estimate the banking sector's position.
The denominator matters
The higher delinquency ratio does not indicate a rise in delinquent balances within the negative-equity pool.
Both balances fell, but the overall pool contracted faster.
The first-mortgage scope also leaves second-mortgage exposure outside the estimate.