Loans and mortgages are a pain. Wisdom, of course, states that if you don’t need implicitly to utilize a loan or deal with a mortgage, then you shouldn’t. If you have sufficient funds to do what you need to do, in this case acquiring a property, and will still have livable funds thereafter, then whatever reduction in quality of life you may have to endure to see to this, you probably should just deal with.

Unfortunately, with the cost of property and the general cost of living in Hong Kong being so high, and wages being so deplorably low (which just seems to be the rule of thumb for any capitalist society), only the significantly wealthy can pull that off. For the rest of us, we have to apply for a personal loan to do something like this, which leaves us facing the challenge of finding a feasible mortgage loan in Hong Kong. Oh my.

Sadly, there’s no magical solution to finding a solid loan or adjustable rate mortgage. I can’t tell you exactly where to go or exactly what the perfect criteria for you would be. What I can do, however, is explained to you the pitfalls of which to be wary, thus allowing you to detect whether or not an offered mortgage loan or personal loan is as benevolent as it would have you believe.

First, let’s talk about why loans are so hard to get in the first place.

Why are loans so hard to get?

So, you’ve had steady employment for quite some time, you make a livable wage (or at least what the government considers to be one), you have fairly neutral credit or maybe nonexistent credit simply because you’ve been smart in avoided the use of credit cards and previous loans when you didn’t need them. By all logic, given your steady and reliable employment, lifestyle and income, you should be considered viable for a reasonable loan.

Well, that’s probably not going to be the case. The problem is that a lot of people have ruined it for everyone else. If someone defaults on the loan, it can ruin their credit further, they can even get them soon, but at the end of the day, if they don’t have the money to pay what they owe, the lender is just simply going to be out that money was additional overhead for chasing them in the first place. Yes, the reckless or potentially criminal individual who broke the contract will be punished to some form or another, but the lender, who sole motivation is understandably to profit in the long run, isn’t profiting when this happens.

And so, when you go to apply for a personal loan, nine out of 10 times, they’re going to expect collateral, a good credit report, or both. Ouch. If they don’t expect these things, the interest rates can be extremely high. In Hong Kong, there are a lot of lending agencies which are actually sharks in disguise, so watch out for those high interest rates. If it seems too good to be true, especially if your credit is poor, it probably is. You will be in debt up to your eyeballs long before you get to the point where you were ready to pay off the initial loan and face value interest costs.

Can I get a low interest mortgage loan in Hong Kong?

This depends on what you consider to be low interest. Property being expensive in Hong Kong, and the problem with loans mentioned above, mean that you probably won’t be or get one that’s as low as you expect.

At the end of the day, don’t go running into little shops that claim to be financial aid groups, payday advances or other lending services. Look online, as odd as it may sound, because that’s where honest lenders and mortgage loan agencies can be found these days.

Know what the legal interest rates are, and aim for about 25% lower than the maximum permitted for both of these by law. Honestly, you’re not going to get much lower than that for either of these. Just go when informed when you apply for a personal loan, and just face the fact that yes, if you’re not already somewhat wealthy and with good credit, you are going to eat some nasty interest rates.