27th October 2026 – (Hong Kong) A Hong Kong man spent twenty years saving for a flat. He bought one and lived in it for a year. Then he sold it, quit his job and posted one word on Threads on 24th October: “freedom”. People replying asked whether he had made money or lost it. Hardly anyone asked the more useful question. Why would a home, the thing so many young people here work toward, start to feel like something to escape?
The answer starts with how much he borrowed.
Look at the rules first. Since October 2024, the Hong Kong Monetary Authority has set the standard loan-to-value ratio at 70 per cent. It has also let borrowers spend up to half their income on debt repayments. Mortgage insurance can push the loan ratio higher for first-time buyers. These are the most generous terms in more than a decade. But they only cap what a bank may lend. They say nothing about what a borrower should take. Then look at the market. Prices rose 12.7 per cent in the year to June, the fastest pace since 2018. They slipped 0.8 per cent in July and barely moved in August. Mortgage applications fell 24 per cent in July to 9,212 and another 8.3 per cent in August to 8,446. In August the value of approved loans dropped 28.2 per cent in a single month to HK$32.2 billion. The only category that grew was refinancing, up 6.8 per cent, which is what you would expect if existing owners are looking for relief. On 17 September, the HKMA raised its base rate for the first time since 2023. One-month HIBOR is the rate behind nearly six in ten new mortgages. It has climbed to around 3 per cent from 2.4 per cent in April.
The delinquency ratio is just 0.11 per cent. However, the rally is losing steam, borrowing costs are rising and banks are approving less. A careful buyer should notice all three.
Now take a hypothetical HK$6 million flat. With a 30 per cent down payment the loan is HK$4.2 million. At 3.8 per cent over 30 years the monthly payment is about HK$19,600. Borrow 90 per cent instead and the payment rises to about HK$25,200. Over three decades a two-point rise in rates is nothing unusual. If it happens, the payment on the larger loan grows to roughly HK$31,700.
Compare that with renting. Mid-sized flats here earn a gross rental yield of about 2.9 per cent, so the same home would rent for around HK$14,500 a month. On the 90 per cent loan, interest alone in the first month is about HK$17,100. That is before any principal, government rates or management fees. The heavily mortgaged owner pays the bank more than a tenant pays the landlord. This is the Threads poster’s problem in one sum. He had become his bank’s tenant and was paying extra for the title.
Leverage also works in reverse. Prices fell 15 per cent in 2022 and about 7 per cent in each of the next two years. By March 2025 they were more than 28 per cent below the 2021 peak. Someone who bought at the top with a 10 per cent deposit lost all their equity within the first year. After that they owed far more than the flat was worth. As prices recovered, negative-equity cases fell from 11,424 to 4,356 in the three months to June. The speed of that fall shows how quickly the problem could come back. Prices are still almost 20 per cent below the 2021 peak. UBS has just raised Hong Kong’s bubble risk to moderate. The median home costs about 14 times the median household income, the least affordable ratio in the world.
Then there is the cost nobody prices in, which is freedom. A borrower at the 50 per cent debt-servicing limit cannot easily change jobs, accept a pay cut, retrain, start a business or survive a few months without work. Unemployment has edged up to 3.8 per cent. A flat bought for stability can make the rest of life less stable. Longer loan terms do not solve this. They lower the monthly bill, but sellers and agents tend to raise prices to match. The buyer ends up in debt for longer without paying less.
So how much borrowing is comfortable? These are rules of thumb rather than formulas.
- Keep the loan at or below 60 to 70 per cent of the price.
- Keep repayments to about 30 per cent of take-home household income, well below the legal ceiling.
- Work out the payment at a rate two to three points higher and make sure you could still pay it calmly.
- After the deposit and stamp duty, keep six to twelve months of expenses in cash.
If a flat only works at 90 per cent leverage and half your income, you need a smaller flat or more time.
Waiting is not failure. Renting while you save, invest and build skills keeps your options open, and options have real value. Record rents hurt, and that should not be dismissed. Still, a tenant who can walk away is in a stronger position than an owner who cannot afford to leave.
The man on Threads did not regret owning a home. He regretted how much of his life it took to pay for it. Young buyers should not give up on owning. They should buy only when the home fits their life, not when their life has to bend around the loan.
