The Cabinet will complete studies on a possible reverse mortgage plan within a year and expects concrete results by the end of next year, Minister of the Interior Jiang Yi-huah (江宜樺) said yesterday.
“The government is still in the process of evaluating the reverse mortgage policy,” Jiang said at a seminar in Taipei yesterday. “As for whether the policy should be legislated or included in the social welfare program, we need to listen to public opinion.”
The minister said the matter was complex and factors such as property value and interest rate fluctuations must be taken into consideration.
Chang Chin-oh (張金鶚), land economics professor at National Chengchi University, said the program should not be viewed merely as a financial product, but as a policy that above all ensures the welfare of the nation’s elderly.
“If the policy is carried out successfully, it will ease the government’s financial burden and have a positive impact on the local real estate industry,” Chang said.
A reverse mortgage is a loan made available to older homeowners, in which the home equity is released in one lump sum or in monthly installments. The borrower’s obligation to repay the loan is deferred until he or she dies or moves out, or when a home is liquidated.
Because of the aging population and low birth rate, the minister said, more older people live alone.
“According to a survey by the ministry, the number of older couples living alone increased to 40 percent as of last year — 15 percentage points higher than in 1996,” Jiang said.
He said that although the main source of income for the elderly still comes from their children, the percentage of those who rely on the government’s subsidies in retirement has increased.
The mortgage program aims to help older homeowners enjoy retirement with their own property, Jiang said.
Chang said Taiwan was more suitable for the program than the US as housing prices are steadier.
“The program will also encourage young people to start planning a home purchase early for retirement,” he said.
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