individualiptd-982

PUBLIC-1HSBCChinaForeignCurrencyHomeMortgageLoanRiskDisclosureForeignCurrencyHomeMortgageLoanisahomemortgageloanserviceofferedbyHSBCChinafornonPRCresidents(i.
e.
Holdersofforeignpassport,valididentityproofforHongKong,MacauandTaiwanresidentsoroverseaspermanentresidence),moresuitablefornonPRCresidentswithUSD/HKDincome,orwithsufficientdepositineithercurrency.
Thisserviceprovidesyoutheopportunitytochooseasuitableloancurrencyandmanageyourmulti-currencyexposureinassetallocation.
However,asyouchooseForeignCurrencyHomeMortgageLoan,youalsoneedtotakeintoconsiderationtheimpactofloancurrencyrestriction,interestrate,exchangeratefluctuationandetc.
onyourrepaymentduringtheloanlife.
RepaymentCurrencyRestrictionanditsImpactBothprincipleandinterestofforeigncurrencyhomemortgageloanarecalculatedinforeigncurrency,thatis,allyournormalrepaymentsandprepaymentsneedtobeinthecurrencyyouchoose.
Forexample,youchooseUSD/HKDasyourloancurrency,whileyourincomeisinRMBwithintheterritoryofChina,accordingtothecurrentStateAdministrationofForeignExchange(SAFE)regulations,youmaybringyourvalididentitydocumentandrelevantsupportingdocumentstothebankandexchangeyourlawfulincomeinRMBintoUSD/HKDforrepayment.
Undersomespecificsituations,ifyouwouldliketoapplyforfullorpartialprepayment,oryourresidencystatushaschangedorthechangeofborrower,youalsoneedtotakeintoaccounttherestrictionsonforeigncurrencypurchase,asyoumaynotbeabletopurchaseenoughUSD/HKDforyourprepayment.
PleaserefertospecificregulationsonforeigncurrencypurchaseunderthecurrentaccountforindividualatSAFE.
InterestRateFluctuationanditsImpactHSBCChinaoffersfloatingratehomemortgageloan.
TheinterestrateofUSD/HKDhomemortgageloanislinkedtotheHSBC(China)USD/HKDBaseLendingRatepublishedonourwebsite.
TheforeigncurrencybaserateisnotlinkedtoPeople'sBankofChina(PBOC)BaseLendingRateforRMBloans,nortoHSBCHongKong'sBestLendingRate;itisdecidedbyHSBCChinabasedonforeigncurrencycostoffundswithinChinaandotherfactors.
Thebankreservestherighttochangeitsforeigncurrencybaselendingrateatanytime,andwithimmediateeffect.
Ifthebaselendingrateincreases,yourmonthlyrepaymentamountwillincreaseaccordingly,andsowillyourDebt-to-Incomeratio(DTI).
PUBLIC-2ExchangeRateFluctuationanditsImpactTheexchangeratefluctuationofforeigncurrencyhomemortgageloanmainlyreferstothefluctuationofthecurrencyofyourincomeorpropertytransaction(i.
e.
RMB)relativetoyourloancurrency(USD/HKD)underthesituationthatyourincomeisnotinthesamecurrencyasyourloancurrency.
IfyourincomecurrencyisnotUSD/HKDandyoudonothavesufficientdepositintheformoftheloancurrency,youwillhavetoconvertyourincometotheloancurrencyformonthlyrepaymentorprepayment,whichmeansthatyouractualDTIratio(orsimplytheratioofyourrepaymenttoincome)willlargelydependsontheexchangerateatthetimeofcurrencyconversion.
Iftheincomecurrencyappreciatesagainsttheloancurrency,theloanprincipleandmonthlyrepaymentcalculatedintermsoftheincomecurrencywilldecreaseaccordingly,andsowillyouractualDTIratio.
Iftheincomecurrencydepreciatesagainsttheloancurrency,theloanprincipleandmonthlyrepaymentcalculatedintermsoftheincomecurrencywillincreaseaccordingly,andsowillyouractualDTIratio.
Inextremecases,yourmonthlyincomemightnotbeenoughtosupportyourmonthlyrepayment.
Atthetimeofloandrawdown,theexchangerateofUSD/HKDtoRMBcouldbesolowthatthedrawdownamountequivalentinRMBcannotmeettherequirementsetonSalesandPurchaseContract,andyouneedtopreparethefundingshortfallonyourown.
Samecouldoccurundercontractandthebankexecutesforeclosureprocess,theexchangerateofUSD/HKDtoRMBcouldbesohighthattheproceedsfromthesaleofthepropertycannotcovertheoutstandingloanamount,andyouneedtomakeuptheshortfallthroughothersource.
RepaymentarrangementanditsimpactUnderCovid-19orgeopoliticaltensionssituation,youmaycomeacrossdifficultiesforFCYfunddeposit,conversion,ortransferduetounexpectedbranchserviceclosure,lockdownofcross-bordertravel,cross-bordercapitalliquidityrestrictionandetc.
Wekindlyadviseyoutoprepareforloancurrency(HKD/USD)inadvancetoavoidrepaymentoverdueandtransferringtoyourbankrepaymentaccount.
ScenarioAnalysisBelowscenariosaresolelyhypotheticalandaremeanttoillustratetheimpactofforeigncurrencyhomemortgageloaninexchangeratefluctuation.
Thisisnotaforecastoftheactualsituation.
IfyourincomeisinRMBandyourloancurrencyisUSD,thenyouwillbeartheexchangerateriskofRMB(incomecurrency)toUSD(loancurrency)duringtheloanlife.
Let'sassumeyourappliedloanamountwasRMB6,000,000equivalentUSD,andtheexchangerateofUSD/RMBwas6atthetimeofdrawdown,thusyourloanprincipleinUSDwas1,000,000.
Withtheloantenorof30years,interestrateof4%p.
a.
andmonthlystraightlineastherepaymentmethod,themonthlyinstalmentwassetatUSD4,774.
15,orRMB28,644.
90usingtheexchangerateatdrawdown.
Scenario1Afteroneyear,RMBdepreciatedagainstUSDby5%to1USD=6.
3RMB,yourmonthlyrepaymentremainsunchangedatUSD4,774.
15,whiletheequivalentRMBamountincreasesto30,077.
15.
FromtheRMBperspective,yourmonthlyrepaymenthasincreasedby5%.
TheremainingprincipleoftheloanafteroneyearisUSD982,389.
64.
IfyouplantoapplyforfullPUBLIC-3prepayment,withouttakingintoaccounttheprepaymentpenaltyorcharge,youwillhavetosellRMB6,189,054.
73forfullprepaymentinUSDbasedonthespotratewhenyousell.
Scenario2Afteroneyear,RMBdepreciatedagainstUSDby25%to1USD=7.
5RMB,yourmonthlyrepaymentremainsunchangedatUSD4,774.
15,whiletheequivalentRMBamountincreasesto35,806.
13.
FromtheRMBperspective,yourmonthlyrepaymenthasincreasedby25%.
TheremainingprincipleoftheloanafteroneyearisUSD982,389.
64.
Ifyouplantoapplyforfullprepayment,withouttakingintoaccountoftheprepaymentpenaltyorcharge,youwillhavetosellRMB7,367,922.
30forfullprepaymentinUSDbasedonthespotratewhenyousell.
Scenario3Afteroneyear,RMBappreciatedagainstUSDby5%to1USD=5.
7RMB,yourmonthlyrepaymentremainsunchangedatUSD4,774.
15,whiletheequivalentRMBamountdecreasesto27,212.
66.
FromtheRMBperspective,yourmonthlyrepaymenthasdecreasedby5%.
TheremainingprincipleoftheloanafteroneyearisUSD982,389.
64.
Ifyouplantoapplyforfullprepayment,withouttakingintoaccountoftheprepaymentpenaltyorcharge,youwillhavetosellRMB5,599,620.
75forfullprepaymentinUSDbasedonthespotratewhenyousell.
YouarealwaysprovidedwithanopportunitytounderstandtherisksandchooseasuitableloancurrencybeforeyousigntheMortgageContractandagreetoborrowfromHSBC.
WealsorecommendthatyouseekindependentfinancialandlegaladvicepriortoenteringintoanagreementforaForeignCurrencyHomeMortgageLoan.
WehopethisinformationhashelpedyoutounderstandtherisksinvolvedinForeignCurrencyHomeMortgageLoan.
FormoreinformationregardingHSBC'sHomeMortgageLoanyoucanrefertoourwebsiteatwww.
hsbc.
com.
cnandvisitourHomeLoanspageorcalluson8008302880.
Confirmedandsignedby:Date:*AlltheaboveillustrationsarebasedonthecurrentregulationsofStateAdministrationofForeignExchange(SAFE)andotherrelatedlaws,theBankmightchangethecurrentpracticewithoutadditionalnoticeifchangesaremadetosuchregulationsandlaws.