Taipei– A 99-year-old man has become the oldest “reverse mortgage” client at the local bank that was the first to unveil the product in Taiwan.
Taiwan Cooperative Bank, which first launched the program in late 2015, said the man will receive a monthly allowance of NT$20,000 (US$644.5) per month under the program as it presented the results of the program to date.
Reverse mortgages — in which homeowners borrow money against the value of their home — allow retirees to receive cash for their equity without disrupting their lives or forcing them to move.
The bank said it had approved 549 reverse mortgages worth a total of NT$3.2 billion as of the end of 2016.
Borrowers under the program received average loans of NT$5.77 million over a period of 21.4 years that provide them an income of NT$25,000 a month.
Bank executives said the previous oldest reverse mortgage client — a 95-year-old — applied for a six-year loan and will receive NT$200,000 a month, to be used to provide regular donations to various charities.
In a more detailed profile of its reverse mortgage clients, the bank said the 65-70 age group accounted for 32.1 of reverse mortgage loans, while the 71-71 and 76-80 age brackets each accounted for nearly 20 percent of the loans.
Sixty percent of the applicants approved for a loan under NT$5 million, but five applicants received a loan of over NT$30 million.
The loan period mostly falls between 21 and 30 years, accounting for 52 percent, followed by the period between 11 years and 20 years.
Applicants living in the cities of Taipei, New Taipei and Taichung, accounted for 58 percent of the total.
The bank has said it was inspired to launch the program because many people spend much of their working lives paying off their mortgages and end up with little cash at their disposal by the time they retire but plenty of equity in their homes.
Reverse mortgages are fairly common in the United States and in other parts of the world, but have been controversial because they have resulted in abuses by lenders.
Source: Focus Taiwan News Channel