A reverse mortgage program for older homeowners is becoming more popular in Taiwan, as the number of applications and lending amounts continue to grow, the Financial Supervisory Commission said on Thursday.
Reverse mortgages allow older homeowners to borrow money against the value of their home without having to move out, with qualified applicants needing to be older than 60, according to most banks’ regulations.
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, commission data showed.
The amount of lending also grew from NT$12.5 billion (US$404.69 million) a year earlier to NT$17.7 billion as of the end of last month, the data showed.
Most loans were provided to homeowners in Taipei, New Taipei City and Keelung, with 1,610 cases in all, or 50.5 percent of the total, the commission said.
Due to high housing prices, borrowers living in the greater Taipei area could receive more money against the value of their properties, which helped boost their willingness to participate in the program, Banking Bureau Deputy Director Wang Li-chun (王立群) told a news conference.
Taichung, Changhua County and Nantou County ranked second in terms of the number of loans at 458 combined. They were followed by Taoyuan, Hsinchu and Miaoli County with 379 loans in total, the data showed.
Women were slightly more interested in the program, as they accounted for 54.17 percent of all borrowers, the data showed.
The commission said it was not sure why women participated in the program more.
One explanation could be that women usually live longer than men and need to fund their retirement needs, Wang said.
Sate-run banks continued to take the lead in supporting the program, with Taiwan Cooperative Bank (合作金庫銀行), Land Bank of Taiwan (土地銀行) and Hua Nan Commercial Bank (華南銀行) taking the top three places in terms of lending amounts.
Taiwan Cooperative Bank completed 1,288 transactions totaling NT$7.6 billion, followed by Land Bank’s 965 transactions totaling NT$5.6 billion and Hua Nan Commercial Bank’s 612 transactions for NT$2.7 billion.
Privately run lenders have remained on the sidelines due to concerns about credit risk and a lack of government assurance, the commission said.
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