Profitability and risk profile of reverse mortgages: A cross-system and cross-plan comparison

Yung-Tsung Lee, Ko-Lun Kung and I-Chien Liu

Insurance: Mathematics and Economics, 2018, vol. 78, issue C, 255-266

Abstract: This study conducts a cross-system and cross-plan comparison of reverse mortgages. We compare the systematic distinctions and analyze the risk and profitability of reverse mortgages in two prominent types of market arrangements: (1) A market where a public external insurer exists (i.e., the Home Equity Conversion Mortgage program in the U.S. market). (2) A market where an external insurer is absent (i.e., the Australian market). Two typical payment plans, the lump-sum and annuity payment, are examined and compared using stochastic dominance criteria.

Keywords: Reverse mortgages; Home Equity Conversion Mortgage; Profitability analysis; Risk analysis; Stochastic dominance (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:insuma:v:78:y:2018:i:c:p:255-266

DOI: 10.1016/j.insmatheco.2017.09.019

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