A reverse mortgage program for older homeowners has become more popular in Taiwan, with the number of approved loans and total lending jumping double-digit percentage points from a year earlier, Financial Supervisory Commission data showed.
The cumulative number of loan approvals from 14 local banks reached 4,080 as of the end of last year, a 32.9 percent increase from the end of 2018, while cumulative lending rose 34.5 percent annually to NT$22.8 billion (US$753.05 million) as of the end of last month, the data showed.
A reverse mortgage allows older homeowners to borrow money against the value of their homes without having to move out, the commission said in a statement on Wednesday.
It also gives financial security to applicants and is viewed as an option to social assistance or social insurance, it added.
In Taiwan, most banks require applicants for such loans to be older than 60.
Homeowners in Taipei, New Taipei City and Keelung continued to lead the other regions in terms of approved loans, with combined approvals reaching 2,072, or 50.7 percent of the nation’s total, and combined loans totaling NT$15.84 billion, or 69.5 percent of overall lending, the data showed.
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.
Homeowners in Taichung and Changhua and Nantou counties ranked second in terms of the number of loan approvals at a combined 589, followed by those in Taoyuan and Hsinchu and Miaoli counties with a total of 470 approvals, the data showed.
By comparison, homeowners in outlying areas such as Orchid Island (Lanyu, 蘭嶼), Penghu and Matsu received a combined 17 approved loans, less than 1 percent of the total, the data showed.
Women were slightly more interested in the program, as they accounted for 55.27 percent of all borrowers, which might be attributed to women usually living longer than men and needing to fund their retirement needs, the commission said.
Reverse mortgages last year had an average term — the number of years borrowers live in their homes after taking out a mortgage — of 21.88 years, the data showed.
State-run banks continued to 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 money lent, the data showed.
Taiwan Cooperative Bank completed 1,610 transactions totaling NT$9.55 billion, followed by Land Bank’s 1,314 transactions totaling NT$6.46 billion and Hua Nan Commercial Bank’s 731 transactions for NT$3.54 billion, the data showed.
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