Reverse mortgage lending in Taiwan is accelerating as more elderly homeowners tap rising property values to fund their retirement, signaling that the once-niche financial product is entering a faster growth phase.
The trend comes as Taiwan rapidly moves toward becoming a “super-aged” society — when at least 20 percent of the population is aged 65 or older — increasing pressure on households to secure stable retirement income.
Sixteen domestic banks had approved 10,663 reverse mortgage loans totaling NT$62.8 billion (US$1.99 billion) as of the end of the first quarter of this year, with new approvals hitting a record pace, despite the business typically slowing early in the year, Financial Supervisory Commission data showed.
Photo: Kelson Wang, Taipei Times
In the January-to-March period, lenders approved 323 loans totaling NT$2.36 billion — the highest number for the same period on record.
Since the program’s launch in 2015, reverse mortgage lending had expanded at a moderate pace.
From 2015 to 2024, annual approvals ranged from about 760 to 1,200, with loan volume of NT$4.5 billion to NT$6.5 billion — equivalent to about 200 to 300 loans totaling NT$1.2 billion to NT$1.6 billion per quarter.
The pace began to pick up last year as quarterly approvals consistently exceeded 300 cases and loan volume surpassed NT$2 billion.
Bankers attribute the acceleration to growing public acceptance of the product, rising awareness among older households about planning their retirement income and persistently high housing prices that boost borrowing capacity.
Rising property values in the Taipei area illustrate the effect. If a home’s valuation increases from NT$20 million to NT$24 million, the available loan amount would rise by about NT$2.4 million under a typical 60 percent loan-to-value ratio.
The reverse mortgage lending business remains heavily concentrated among state-controlled lenders.
In the first quarter of this year, six government-controlled banks — Taiwan Cooperative Bank Ltd (合庫銀行), Land Bank of Taiwan Co (土地銀行), First Commercial Bank Co (第一銀行), Hua Nan Commercial Bank Ltd (華南銀行), Bank of Taiwan Co (台灣銀行) and Mega International Commercial Bank Co (兆豐銀行) — accounted for 319 newly approved loans, or 98 percent of the total.
Their combined loan volume reached NT$2.33 billion, representing about 98 percent of the market.
Taiwan Cooperative Bank alone added NT$742 million across 113 loans during the quarter, contributing to more than one-third of new business.
Policy support could further boost demand, as the government is promoting “all-age finance” initiatives this year, with reverse mortgages positioned as a key tool for retirement financial planning, bank executives said.
Under a potential framework, loan proceeds could be paid directly to long-term care institutions if borrowers use such services, helping reduce misuse risks, while improving the efficiency of fund allocation.
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