Population aging and the sustainability of retirement financing are critical challenges facing many developed economies. In South Korea, elderly poverty remains a critical issue, despite widespread homeownership among older adults. Although the home pension program allows retirees to unlock...

This paper introduces an innovative sell-type home reversion product aimed at monetizing Singapore's public flats, serving as a new alternative to the existing Singapore Lease Buyback Scheme (LBS). This new product not only retains the LBS's guaranteed period of residence in the property along...

Population aging poses significant challenges to the sustainability of pension systems. This study presents an integrated methodological approach that uniquely combines actuarial life-cycle modeling with agent-based simulation to assess the potential of Reverse Mortgage Loans (RMLs) as a dual...

How do retirees choose among home equity release products? Despite housing wealth being households’ largest asset, little is known about preferences for different equity release products. We conduct a survey experiment comparing home annuities, reverse mortgages, and an opt-out option among...

How do retirees choose among home equity release products? Despite housing wealth being households' largest asset, little is known about preferences for different equity release products. We conduct a survey experiment comparing home annuities, reverse mortgages, and an opt-out option among the...

In developed countries such as Spain, where the population is increasingly aging, retirement planning and longevity risk represent major societal challenges. In Spain, in particular, a significant proportion of household wealth is concentrated in real estate, primarily in the form of...

In this study, we examine the feasibility of reverse mortgages in Brazil from the perspectives of both policyholders and insurers. Reverse mortgage is a financial product where the property's ownership is transferred to an insurance company in exchange for a guaranteed annuity, while the insured...

Loan-type reverse mortgage plans and sell-type home reversion plans for retirement financing are two well-known equity release plans that entitle homeowners not only to release cash from their properties but also to allow them to age in place. Recently, a new hybrid equity release plan was...

This paper examines the state of reverse mortgage markets in selected countries around the world and considers the potential benefits and risks of these products from a financial inclusion and economic benefit standpoint. Despite potentially increasing demand from aging societies - combined with...

This study explored the option value embedded in a reverse mortgage in Korea through an empirical analysis, using the Black-Scholes option-pricing model. The value of a reverse mortgage is affected by the variation in house prices. However, older homeowners using reverse mortgages are able to...

Few retirees use reverse mortgages. In this paper, we investigate how financial literacy and prior knowledge of the product influence take-up by conducting a stated-preference experiment. We exogenously manipulate characteristics of reverse mortgages to tease out how consumers value them and...

The demographic change underway, declining adequacy levels from traditional pay-as-you-go old-age social security systems, structural reforms in pension schemes and the reduction in the traditional family support have increased the need for additional private savings to cover the old age income...

In this paper, we suggest a Bayesian multivariate approach for pricing a reverse mortgage, allowing for house price risk, interest rate risk and longevity risk. We adopt the principle of maximum entropy in risk-neutralisation of these three risk components simultaneously. Our numerical results...

High borrowing costs, limited knowledge and preferences could explain why few Canadianspurchase reverse mortgages, an asset decumulation product that is appealing to those who arehouse-rich but cash-poor. In this paper, we first use an asset pricing model to calculate theactuarial fair costs of...

We propose a new method for estimating the regulatory capital requirements for a portfolio of reverse mortgages owned by a financial institution, according to Basel II and III. The method considers house price risk, mortality risk and interest rate risk; consequently, regulatory capital...

Equity release schemes (ERS) may provide pension insurance by liquidating owner-occupied residential property. This paper examines the available data on market conditions for such products in all EU member states to cluster countries. Need for ERS is measured by demographic pressure, risk of...

The main goal of this article is to describe the attitudes towards the reverse mortgage (RM) as one of the options for acquiring additional financial resources by those who have finished their professional activity and retired. The article reports the results of our own quantitative research....

Building up sufficient capital for old-age provision often is a challenge for private households. For homeowners, one way to generate old-age income from illiquid housing wealth is the use of equity release products such as home reversion plans or reverse mortgages. However, in Germany the...

Housing wealth is a largely untapped resource that can help older adults supplement their incomes and buffer financial shocks in retirement. The federally insured reverse mortgage offers adults age 62 and older access to home equity with no required monthly payment, and protection for homeowners...

This paper uses the most recent wave of a nationally representative dataset to examine the factors associated with elderly homeowners' decision to obtain reverse mortgage loans. The findings of this study suggest that very few homeowners participated in the reverse mortgage market, and...

This paper examines the available data on market conditions for equity release schemes (ERS) in all EU member states to cluster Member States for subsequent extrapolation of the findings from six EU Member States (DE, IT, NL, IE, HU, and the UK) to the EU as a whole. It aggregates various...

This paper studies a household's optimal demand for a reverse mortgage. These contracts allow homeowners to tap their home equity to finance consumption needs. In stylized frameworks, we show that the decision to enter a reverse mortgage is mainly driven by the differential between the aggregate...