HKMA says negative-equity mortgages fell to 3,819 at end-September

The Hong Kong Monetary Authority said residential mortgage loans in negative equity fell at the end of September 2026, even as the three-month delinquency ratio on those loans edged higher. The survey results point to a smaller pool of underwater mortgages but a slightly larger share of them in arrears, according to the HKMA's 30 October 2026 release.

Evidence and context

The HKMA estimated 3,819 residential mortgage loans in negative equity at end-September 2026, down from 4,356 cases at end-June 2026. The aggregate value of those loans decreased to HK$17.3 billion from HK$19.6 billion over the same period, while the unsecured portion declined to HK$0.8 billion from HK$0.9 billion, the authority said.

The three-month delinquency ratio of residential mortgage loans in negative equity rose to 1.34% at end-September 2026 from 1.25% at end-June 2026. The HKMA said the ratio increased because the aggregate value of negative-equity loans fell faster than the aggregate value of delinquent negative-equity loans.

The authority said the remaining negative-equity cases were mainly related to bank staff housing loans or mortgages under mortgage insurance programmes, which generally carry higher loan-to-value ratios. It also noted that the survey covers first mortgages known by reporting institutions to be in negative equity and excludes co-financing schemes where second mortgages are not recorded, meaning the true extent of negative equity in those cases is unknown. The surveyed institutions represent about 99% of the industry's mortgage portfolio, and the HKMA extrapolates the results to estimate the banking sector as a whole.

The figures are observation-date statistics rather than real-time market data, and negative equity does not itself mean a borrower has defaulted. The latest results were published alongside the HKMA's residential mortgage survey release on 30 October 2026.