Reverse Mortgages To Be Introduced

Reverse mortgages are to be introduced, enabling those aged 60 and above to borrow against the value of their homes in order to reduce their financial dependence on their families or the state.

Draft assumptions for the necessary legislation were adopted by the Ministry of Finance on 19 April 2010. Similar laws have been introduced in 10 EU member states, USA and Australia.

Under the draft proposals:

• reverse mortgages could only be offered by lenders authorised by the Financial Supervision Authority or an equivalent regulatory authority in another EU country
• borrowers eligible for a reverse mortgage must be at least 60 years old and own property (ie hold the ownership title, a right of perpetual usufruct or a building cooperative member's ownership right)