Redesigning Home Reversion Products to Empower Retirement for Singapore’s Public Flat Owners

Koon Shing Kwong (), Jing Rong Goh, Jordan Jie Xin Lee and Ting Lin Collin Chua
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Koon Shing Kwong: School of Economics, Singapore Management University, Singapore 178903, Singapore
Jing Rong Goh: School of Economics, Singapore Management University, Singapore 178903, Singapore
Jordan Jie Xin Lee: School of Economics, Singapore Management University, Singapore 178903, Singapore
Ting Lin Collin Chua: School of Economics, Singapore Management University, Singapore 178903, Singapore

Risks, 2025, vol. 13, issue 2, 1-19

Abstract: This paper introduces an innovative sell-type home reversion product aimed at monetizing Singapore’s public flats, serving as a new alternative to the existing Singapore Lease Buyback Scheme (LBS). This new product not only retains the LBS’s guaranteed period of residence in the property along with life annuity incomes but also enhances the product features to meet specific homeowner needs, including the ability to age in place, flexibility in retaining part of the property, options for bequests, and guaranteed principal return. By incorporating these additional features, the new product seeks to stimulate greater demand for monetizing public flats among asset-rich but cash-poor homeowners. An actuarial pricing model is developed to establish a transparent and fair framework for justifying the cost of each product feature. Additionally, we present a cost–benefit analysis from both the provider and consumer perspectives to highlight the major contributions of the new product when compared to the LBS.

Keywords: reverse mortgage; Lease Buyback Scheme; equivalence principle; equity release products (search for similar items in EconPapers)
JEL-codes: C G0 G1 G2 G3 K2 M2 M4 (search for similar items in EconPapers)
Date: 2025
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