Reverse mortgages have grown more popular in the nation of Taiwan during 2019, with the number of approved loans and total lending figures having increased by double-digit percentage points from a year earlier. This is according to data from the Taiwan Financial Supervisory Commission, and as reported by the Taipei Times.
“The cumulative number of loan approvals from 14 local banks reached 4,080 as of the end of last year, a 32.9% increase from the end of 2018,” the Times said. “Cumulative lending rose 34.5% annually to NT$22.8 billion (US$753.05 million) as of the end of last month, the data showed.”
The Taiwan Financial Supervisory Commission describes a reverse mortgage in the country as an instrument which “allows older homeowners to borrow money against the value of their homes without having to move out,” while it can “also give financial security to applicants and is viewed as an option to social assistance or social insurance,” according to a statement the commission shared with the Times.
Unlike the Home Equity Conversion Mortgage (HECM) program in the United States, the earliest age of eligibility for Taiwanese residents seeking a reverse mortgage is 60.
Regionally speaking, the highest number of approved reverse mortgage loans are coming from Taipei, New Taipei City and Keelung, with combined approvals reaching 2,072, or 50.7% of the nation’s total. Combined loans total NT$15.84 billion ($524.1 million USD), or 69.5% of overall reverse mortgage lending, the Times said.
“The commission attributed the figures to high housing prices in the region, which it said enabled borrowers to receive more money against the value of their properties and boosted their willingness to participate in the program,” the story reads.
Female borrowers express slightly more interest in the program according to the data, since women account for 55.27% of all Taiwanese reverse mortgage borrowers, according to the commission. This could be attributed to women’s longer life expectancy when compared with men, requiring additional means to fund their retirements, the story said.
State-run banks dominate the reverse mortgage lending space in Taiwan, with data naming Taiwan Cooperative Bank, Land Bank of Taiwan and Hua Nan Commercial Bank as the top three places in terms of money lent, the commission said.
Read the story at the Taipei Times.