Understanding mortgage insurance

Mortgage insurance helps lenders achieve many goals, including transferring risk, providing operational efficiency and expanding their customer base.

It protects the lender in the unfortunate event of the borrower failing to repay their home loan. When lenders agree to lend a customer money, there is a risk that they won't get the money back if the customer is not able to complete their repayments. For example, although they have the house as security, if property values decline there may not be enough money from the property’s sale to repay the outstanding loan balance.

Mortgage insurance helps lenders offer home loans to more people and increase the amount they are prepared to lend by taking some of the risk out of lending the money. It means that more people are likely to get a loan and the home they want sooner.

This insurance should not be confused with mortgage protection insurance. Mortgage protection insurance covers borrowers for the payment of their mortgage instalments in the event of unforeseen circumstances including unemployment, illness or death.

QMI tailors mortgage insurance and risk transference options for clients.

We insure mortgage loans for residential property in Hong Kong. Each individual property and the proposed loan are reviewed against specific criteria to determine if mortgage insurance will be offered for a particular loan.

Mortgage insurance is obtained by lenders to protect them against losing money on a home loan. It does not protect the borrower and providers are heavily regulated by government authorities to make sure the insurers hold enough money in reserve to pay all likely claims. These reserves, together with government regulation, give lenders the confidence to offer competitive loan terms to prospective homebuyers. In this way QMI plays an important role in the home loan lending market.