RISK AVERSE: State-run banks have been the primary lenders of reverse mortgage loans, as private banks have avoided the practice due to concerns about credit risk
Date: May 02, 2020
By: Kao Shih-ching / Staff reporter
The growth of reverse mortgages decreased last quarter, increasing just 4.6 percent to NT$23.9 billion (US$802 million) from a quarter earlier, compared with quarterly growth of 7.65 percent in the same period last year, as consumers became more conservative amid the COVID-19 pandemic, Financial Supervisory Commission (FSC) data showed.
The number of reverse mortgage applications rose 4.7 percent to 4,272 at the end of March, from 4,080 at the end of last year, the data showed.
Reverse mortgages allow homeowners to use their property as collateral to borrow money. Most banks require borrowers to be older than 60 to qualify.
“It is not surprising to see that reverse mortgages decreased in the first quarter, as the COVID-19 pandemic has changed consumers’ behaviors. Some of them have delayed making big purchases or significant financial decisions amid the economic uncertainty,” a commission official said by telephone.