The social and economic effects of introducing reverse mortgages in Chile

José Donoso, José Luis Ruiz and Pablo Tapia

Revista CEPAL, 2019

Abstract: This study simulates the social and economic effects of introducing reverse mortgages in Chile. It uses the 2009 Social Protection Survey and recent simulation methodologies to analyse the monetary gain associated with taking out such a loan, which is paid in periodic instalments over the homeowner’s lifetime. Eligible individuals are retired homeowners, who account for 70% of the older population. Monies received increase exponentially depending on the age at which the reverse mortgage is taken out. Lastly, the increase in liquidity has significant social potential, as it could reduce the poverty rate in the target group by 15%.

Date: 2019-12-19
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Persistent link: https://EconPapers.repec.org/RePEc:ecr:col070:45416

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