Reverse Mortgage Popularity is Growing in Taiwan

Applications and lending amounts for reverse mortgage programs are growing in Taiwan, signaling increasing demand and popularity for the country’s population of older homeowners.

“The number of applications to 13 local banks reached 3,186 as of the end of last month, a 38 percent increase from 2,309 a year earlier,” according to the Taipei Times, citing data released last year by the nation’s Financial Supervisory Commission (FSC). “The amount of lending also grew from NT$12.5 billion (US$404.69 million) a year earlier to NT$17.7 billion (US$574.8 million) as of the end of last month,” according to the data.

State-run banks have taken the lead in supporting the nation’s reverse mortgage program. Taiwan Cooperative Bank, Land Bank of Taiwan and Hua Nan Commercial Bank occupy the top three places based on their lending amounts, according to the report.

“Taiwan Cooperative Bank completed 1,288 transactions totaling NT$7.6 billion (US$246.8 million), followed by Land Bank’s 965 transactions totaling NT$5.6 billion (US$181.9 million) and Hua Nan Commercial Bank’s 612 transactions for NT$2.7 billion (US$87.7 million),” the report says.

Private lenders have “remained on the sidelines” according to the report, with the FSC citing concerns related to credit risk and a lack of government assurance to account for the reservations of private institutions in joining the business.

FSC data also reveals that much of the loan activity is concentrated in the capital city of Taipei, the surrounding and populous New Taipei City along with the neighboring Keelung. These areas make up a total of 1,610 cases, just over 50 percent of the total.

High property values in the Taipei area could lead to larger loan proceeds, which helped to increase the participation of homeowners in the area, according to Taiwan Banking Bureau Deputy Director Wang Li-chun to a recent news conference, the report reads.

Women showed a higher degree of interest in reverse mortgages than men according to the data, with women making up just over 54 percent of all recorded borrowers.

“One explanation could be that women usually live longer than men and need to fund their retirement needs,” the report says in relating comments made by Wang at the aforementioned news conference.

Read the full report at the Taipei Times.

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