Publication Type
Journal Article
Version
publishedVersion
Publication Date
5-2023
Abstract
Home equity represents a substantial share of retirement wealth for many older persons, particularly in Asia where national housing policies have encouraged home-ownership. This paper explored the potential for reverse mortgages to help 'asset-rich and cash-poor' older Singaporeans unlock their home equity while ageing in place. The empirical analysis was based on a nationally representative survey of home-owners age 50+ in the 2018 Singapore Life Panel (N = 6,258). Our analyses showed that the average older home-owner holds some 60 per cent of total net wealth in housing equity, suggestive of high demand potential for reverse mortgage products. Nevertheless, actual interest in such products was much below potential demand. Only one in four older home-owners indicated interest in commercial reverse mortgages if these were to become available; a larger majority had never heard of the financial product. Interest in reverse mortgages was positively associated with product awareness and self-rated product understanding. This implies that a critical step towards building consumer interest would be to enhance awareness of such products and simplify related contract terms. Having a mortgage, fewer children, financial literacy and preparedness for retirement were also positively associated with interest level. These results have implications for targeted interventions to enhance consumer awareness and spur interest in reverse mortgages, especially in ageing societies where older people have built up substantial equity through the housing market over time.
Keywords
home-ownership, housing wealth, financial literacy, retirement policy, Singapore
Discipline
Asian Studies | Finance and Financial Management | Gerontology | Real Estate
Research Areas
Finance
Publication
Ageing and Society
Volume
43
Issue
5
First Page
1104
Last Page
1121
ISSN
0144-686X
Identifier
10.1017/S0144686X21001045
Publisher
Cambridge University Press
Citation
FONG, Joelle H.; MITCHELL, Olivia S.; and KOH, Benedict S. K..
Asset-rich and cash-poor: Which older adults value reverse mortgages?. (2023). Ageing and Society. 43, (5), 1104-1121.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/6997
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.
Additional URL
https://doi.org/10.1017/S0144686X21001045
Included in
Asian Studies Commons, Finance and Financial Management Commons, Gerontology Commons, Real Estate Commons