The SPAIRs Scheme is a contractual arrangement historically marketed in Spanish coastal areas, generally to foreign property owners, with the purpose of enabling such property owners (or their successors) to avoid or significantly reduce Spanish inheritance tax. Specifically, a reverse mortgage was granted, under which part of the loan capital was paid to the property owner and another part was invested in investment funds. The expected return on those funds was intended to be sufficient to cover the mortgage interest and, in addition, to provide supplementary income to the owners. However, following the 2007 financial crisis, the funds failed to achieve the expected performance, with the result that ownership of the properties became threatened by the potential enforcement of the mortgage due to non-payment of interest and other related costs. In England, the courts ruled that there had been no misrepresentation or fraud in the marketing of the product. By contrast, the Spanish Supreme Court has declared all such contracts null and void, applying the doctrine of the causal unity of linked contracts. This paper analyses the structure and marketing of the product, the position taken by the English courts, the reasoning of the Spanish Supreme Court, and considers the possible existence of an immoral cause and its legal implications.

In developed countries such as Spain, where the population is increasingly aging, retirement planning and longevity risk represent major societal challenges. In Spain, in particular, a significant proportion of household wealth is concentrated in real estate, primarily in the form of owner-occupied housing. For this reason, one emerging financial product in the retirement savings space is the reverse mortgage (RM). This study examines the determinants of acceptance of this financial product using survey data collected from Spanish individuals. The intention to take out an RM is explained through performance expectancy (PE), effort expectancy (EE), social influence (SI), bequest motive (BM), financial literacy (FL), and risk (RK). The analysis applies machine learning techniques: decision tree regression is used to visualize variable interactions that lead to acceptance; random forest to improve predictive capability; and Shapley Additive Explanations (SHAP) to estimate the relative importance of predictors. Finally, Importance–Performance Map Analysis (IPMA) is employed to identify the variables that merit greater attention in the acceptance of RMs. SHAP values indicate that PE and SI are the most influential predictors of intention to use RMs, followed by BM and EE with moderate importance, whereas the positive influence of RK and FL is more reduced. The IPMA highlights PE and SI as the most strategic drivers, and RK and BM act as relevant barriers to the widespread adoption of RMs.

Life Care Reverse Mortgages: monitoring the net cashflows of a new hybrid insurance product

Population aging poses significant challenges to the sustainability of pension systems. This study presents an integrated methodological approach that uniquely combines actuarial life-cycle modeling with agent-based simulation to assess the potential of Reverse Mortgage Loans (RMLs) as a dual lever for enhancing retiree welfare and supporting pension system resilience under demographic and financial uncertainty. We explore Reverse Mortgage Loans (RMLs) as a potential financial instrument to support retirees while alleviating pressure on public pensions. Unlike prior research that treats individual decisions or policy outcomes in isolation, our hybrid model explicitly captures feedback loops between household-level behavior and system-wide financial stability. To test our hypothesis that RMLs can improve individual consumption outcomes and bolster systemic solvency, we develop a hybrid model combining actuarial techniques and agent-based simulations, incorporating stochastic housing prices, longevity risk, regulatory capital requirements, and demographic shifts. This dual-framework enables a structured investigation of how micro-level financial decisions propagate through market dynamics, influencing solvency, pricing, and adoption trends. Our central hypothesis is that reverse mortgages, when actuarially calibrated and macroprudentially regulated, enhance individual financial well-being while preserving long-run solvency at the system level. Simulation results indicate that RMLs can improve consumption smoothing, raise expected utility for retirees, and contribute to long-term fiscal sustainability. Moreover, we introduce a dynamic regulatory mechanism that adjusts capital buffers based on evolving market and demographic conditions, enhancing system resilience. Our simulation design supports multi-scenario testing of financial robustness and policy outcomes, providing a transparent tool for stress-testing RML adoption at scale. These findings suggest that, when well-regulated, RMLs can serve as a viable supplement to traditional retirement financing. Rather than offering prescriptive guidance, this framework provides insights to policymakers, financial institutions, and regulators seeking to integrate RMLs into broader pension strategies.

The ageing population and rising housing costs in Switzerland are increasing the number of older adults facing financial housing concerns. Older women have particularly limited housing choices because they, on average, earn less, live longer, and are more likely to live alone. This study explores potential levers to alleviate housing-related financial fears among baby boomer women (aged 55–75) living alone in Switzerland, a subject with limited academic coverage. Using regression and random forest models on unique 2023 survey data (N=371), we examine the influence of socio-demographic, financial, well-being, and housing factors on fears related to affordability, price increases, and lack of housing supply. Key findings show that ownership status, perceived financial situation, and concerns about maintaining one’s lifestyle significantly drive these fears. The fear of unsuitable housing strongly influences perceived lack of supply. These results highlight the importance of retirement planning and support the consideration of measures such as reverse mortgages, co-housing, subsidies, and rent-controlled units.

The article examines the formation of credit products secured by housing collateral for the elderly, focusing on the unique challenges in lending to this group. It highlights age restrictions, stable income, health issues, and socioeconomic factors affecting solvency. The paper discusses loan products such as reverse mortgages and specialized mortgages, which allow older individuals to use real estate for financing. It emphasizes the risks for both borrowers and credit institutions, as well as the ethical and social concerns tied to these loans. The need for legal regulation to protect elderly borrowers’ interests is also addressed. The article stresses the importance of creating financial tools that ensure social protection and financial stability for the elderly. It argues that financial institutions and governments must collaborate to introduce innovative solutions to improve access to financial products. The social and economic benefits of mortgage programs aimed at enhancing retirees' living standards are explored, highlighting how reverse mortgages and simplified mortgage programs improve financial literacy and independence for retirees, while also considering their psychological condition. Reforms and innovations in this area can improve the quality of life for the elderly, enhancing their financial and social well-being. The involvement of financial institutions to protect the rights of elderly citizens, through innovation and reform, can boost living standards, financial independence, and social relations. In conclusion, the research suggests that updating financial products, mortgage programs, and legal frameworks will enhance the financial well-being and social security of elderly citizens.

The increasing population in India necessitates implementing measures to ensure financial stability during their retirement years. A reverse mortgage is a very effective and unique option that allows senior citizens to transform the value of their home equity into a reliable source of income. This study examines the decision-making process of elderly individuals in India regarding reverse mortgage loans using the robust framework of the Theory of Planned Behavior (TPB). This study investigates the impact of the essential characteristics of the TPB model and the mediator role of financial literacy on the intention of older citizens to purchase reverse mortgage loans. The study highlights the lack of understanding among senior personnel regarding financial decisions about adopting reverse mortgages in their old age, specifically concerning their homes by formulating a hypothesis. The study intends to provide significant information to policymakers and financial institutions by examining the role of financial literacy as a mediator within the constructs of the TPB model. Furthermore, the findings enhance the condition of elderly individuals guiding policymakers on improving the range of products and services available to them, implementing a comprehensive strategy for making educated financial decisions and initiating financial literacy programs tailored explicitly for senior residents in India. Therefore, a reverse mortgage is the most suitable choice to ensure a stress-free retirement for elderly individuals in India as it can grant them financial stability and empowerment throughout their later years.

Do Reverse Mortgages Reduce Poverty Rates Among Older Adults Living Alone in Spain? Analysing Their Overall and Gender-Specific Effects

ABSTRACTThis article uses the cross‐quantilogram approach to investigate the asymmetric relationship between Reverse Mortgages (RM) and housing prices (HP) from January 2007 to December 2023 in the U.S. It found a strong negative correlation between the HP and RM for the short term. However, in the longer term, there is a significant increase in positive correlation, especially in higher HP quantiles (0.8–0.95). This indicates an asymmetric relationship between RM and HP. Additionally, fluctuations in consumer prices, interest rates, and economic growth also significantly impact this relationship. These findings offer valuable insights for seniors and policymakers to understand the complex dynamics between Reverse Mortgages (RM) and housing prices (HP), highlighting the importance of real estate management in boosting RM demand and enhancing seniors' economic security.

Population aging is a common phenomenon worldwide. The Senior citizen population is generally termed as ‘Asset Rich, Cash Poor’ because they have huge investment in form of residential houses on their names, but lacks liquid resources for their daily requirements. Reverse Mortgage Loan is a financial product which helps senior citizens to convert the home equity into cash so that they can lead their post retirement life respectfully. The senior citizen borrowers need not to repay the loan during their lifetime. After the death of the borrower, the legal heirs can repay the loan and take back the property. Otherwise the bank can sell the property, adjust the loan amount along with interest and refund the balance amount to heirs. This product is very much in demand in western countries like USA, UK, etc. Since its introduction in India, its demand is very low. Past studies reveals that several factors like wish to pass on the property to children, lack of awareness among senior citizens etc. are the main reasons of its low demand. The supply side i.e. bank/financial institutions also face challenges in providing this loan. Present study compares the challenges faced by lenders from the state of Punjab and Haryana in providing this loan.

Abstract Elderly’s financial status is affected by stochastic lifespan and states of health. The growth of life expectancy in industrialized countries, the inadequacy of pension systems and the high medical costs shed light on the need to provide adequate solutions for retirees, whose wealth is mostly illiquid and mainly composed by own home. The reverse mortgage (RM) contract allows elder homeowners to borrow money using their home as asset for the loan, maintaining the right to live in the house. The debt is repaid by the heirs when the borrower dies. This contract might constitute a valid support for the spending needs that may arise during retirement. The paper deals with a decision problem of a homeowner who is approaching old age and has to evaluate contracting a reverse mortgage or not. In order to investigate the economic effects of RM on elderly’s consumption behavior, we construct a life cycle model tailored to “house rich and cash poor” individuals, whose primary wealth asset is constituted by real estate and who has to deal with the uncertainty about lifespan, future health states and the consequent considerable expenses for medical treatments, as well as house maintenance costs. Elders’ lifetime utility functions take into account consumption preferences, lifespan uncertainty and bequest motivations, in order to capture the impact of the attachment to the property on elder’s financial planning. We solve the optimization problem to find the optimal savings allocation, with and without RM. We present three exemplary cases related to different occurrences of health status, focusing on Italian retired males. Through our analysis, we found out that, in presence of long-term care expenses and house maintenance costs, individual’s liquid wealth significantly increases with reverse mortgage. Moreover, homeowner with a higher bequest motivation experiences lower utility gains from contracting RM plan. Our results provide an alternative tool to explain elderly skepticism in buying this kind of product.

Abstract This paper uses survey methods to assess the impact of access to housing wealth on long‐term care (LTC) insurance demand. We compare two new mechanisms to finance LTC insurance with housing wealth: reverse mortgage loans and home reversion (partial sale and leaseback). Using data from an online survey of urban Chinese homeowners, we find that housing liquidity increases the stated demand for LTC insurance. On average, the survey participants spent 15.7% of their given total wealth to buy LTC insurance when they could use savings and a reverse mortgage, 12.8% when they could use savings and home reversion, and 5.2% when they could only use savings. Product demand was linked to economic factors, demographic variables, health, bequest motives, house price expectations, product understanding, and financial capability. Our results inform the design of new public or private sector programs that allow individuals to access their housing wealth while ‘aging in place’.

One innovative financial instrument that has recently come to light as a potential solution to the problem of unstable income during retirement is the Reverse Mortgage Loan (RML). This loan enables homeowners who are over the age of 60 to borrow money against the equity that they have in their homes. Due to monetary, social, and psychological considerations, a significant number of individuals are unwilling to use RMLs, despite the many benefits that they provide. This study aims to analyse the behavioural elements that influence the desire to use RMLs among older homeowners. The study places a particular focus on attitude as a moderator while conducting its investigation. This research expands upon the Theory of Planned Behaviour (TPB) by include a variety of significant aspects that have an impact on attitude and behavioural intention. These factors include perceived ability, perceived bequest incentive, social influence, and feeling of location attachment. A method known as Partial Least Squares Structural Equation Modelling (PLS-SEM) is used to conduct an analysis of survey data from seven hundred elderly citizens who are homeowners. This is done in order to give robust empirical validation. According to the findings, attitude plays a significant part in the adoption of RML because it has a significant impact on the connection between significant factors and the desire to behave in a certain way. The consequences of these results for legislative and financial policy are significant. For example, there is a need for more targeted communication efforts and trust-building measures in order to promote the adoption of RML among senior homeowners.

A Comprehensive Analysis of Reverse Mortgages within the Indian Retirement Landscape

The Legal Structure and Finical Risk of Reverse Mortgage

Analysis on the Application of Reverse Mortgage combined with Trust in the Super Aged Era

Enabling older adults to age at home is an urgent issue. This study focuses on the attitudes of middle-aged and older people (MAOP) in the capital cities of Taiwan, which are characterised by expensive housing prices and living costs, to examine their preferences for reverse mortgage (RM) schemes. The stated preference method and conditional multinomial logit model are utilised for analysis. The study simulates the total payment duration (TPD) and monthly payment amounts (MPA) to determine the market share of MAOPs’ choices regarding terms. The results indicate that MAOPs tend to opt for RM schemes when they have children, partly enhancing the preference toward the long-term alternative (AL). Increasing the MPA has a positive effect on the market share of the AL scheme, but the amount must be increased to 90% to replace the market share of non-participation schemes significantly. The experimental design of this study could serve as a reference for future RM scheme designs. The findings suggest that there should be more alternative funding sources in an ageing society, particularly through revitalising housing assets, to promote ageing in place.

As Korea experiences rapid population aging, concerns regarding retirement income for retirees and the elderly are increasing. In this context, the reverse mortgage system, or “housing pension,” is a crucial program for both current and future retirees who have made significant investments in homeownership during their working years. Recognizing its importance, the government has expanded the eligibility criteria for the housing pension and provided various incentives, including tax benefits. However, the recent increase in the maximum eligible home price for participation, now set at 1.2 billion KRW based on the officially assessed value, has raised concerns about equity among participants. This study examines the extent of the disparity in benefits according to housing prices and proposes measures to address these inequities. The findings indicate that the level of benefits increases with higher home values, leading to a widening gap. Therefore, adjustments to the housing pension conditions are necessary to ensure fairness in benefit levels across different home prices. The study suggests reducing interest rates for lower-priced homes or increasing interest rates for higher-priced homes to balance the benefit distribution. To improve equity in the housing pension system, the government should provide additional support to offer lower interest rates for homes with lower values.

As Korea experiences rapid population aging, concerns regarding retirement income for retirees and the elderly are increasing. In this context, the reverse mortgage system, or “housing pension,” is a crucial program for both current and future retirees who have made significant investments in homeownership during their working years. Recognizing its importance, the government has expanded the eligibility criteria for the housing pension and provided various incentives, including tax benefits. However, the recent increase in the maximum eligible home price for participation, now set at 1.2 billion KRW based on the officially assessed value, has raised concerns about equity among participants. This study examines the extent of the disparity in benefits according to housing prices and proposes measures to address these inequities. The findings indicate that the level of benefits increases with higher home values, leading to a widening gap. Therefore, adjustments to the housing pension conditions are necessary to ensure fairness in benefit levels across different home prices. The study suggests reducing interest rates for lower-priced homes or increasing interest rates for higher-priced homes to balance the benefit distribution. To improve equity in the housing pension system, the government should provide additional support to offer lower interest rates for homes with lower values.

This study investigated the framework of reverse mortgage (RM) programs in Taiwan, with a particular emphasis on the perspectives of both debtors and creditors. Employing the Lee–Carter model, the research estimated mortality rates in Taiwan while utilizing the theoretical framework to analyze various aspects of RM. House prices were assessed using the house price index as a foundational metric for estimating prices, along with lump-sum loanable amounts and RM considerations. Empirical analysis was conducted on debtors’ loans and incomes and financial institutions’ perspectives. The study delved into parameters such as maximum loanable amounts and income replacement ratios for debtors based on demographic factors such as sex, age, and occupation. Furthermore, the structure of RM programs was scrutinized from the viewpoint of financial institutions, considering factors such as rental income, remaining house value, creditor insurance protection, premium expenses, and creditor profitability. A series of simulations were performed to gauge the effects of different variables on the outcomes. The normal distribution of the house price index (HPI), as verified through the Anderson-Darling (AD) test and Kolmogorov–Smirnov (KS) test, bolstered the theoretical findings. This study’s primary contribution lies in its comprehensive exploration of the structure and advantages of RMs from the dual perspectives of debtors and creditors, a departure from insights from previous research predominantly focused on financial institutions. This research can aid debtors and creditors in evaluating RM programs and making informed decisions regarding asset allocation, thereby facilitating the selection of more suitable programs tailored to debtor characteristics.