Willingness to Accept Reverse Mortgage

Abstract

At age 60, the working adult is turned into retired and stops generating active income. With the reduction in earnings, the aging population is facing the financial challenge to maintain their pre-retirement lifestyle. Hence, the elderly needed to find an alternative source to sustain their pre-retirement lifestyle and pay off their daily expenses. With the current retirement income, it is challenging for the elderly to sustain in their retirement, therefore, a new financial innovation shall be offered to solve the financial constraint of the elderly which elderly can convert the property into cash for self-sustaining without relying on other parties. As Malaysia has yet to launch new financial innovation products such as reverse mortgages, thus, it is crucial to understand the willingness to take up the reverse mortgage, so that the financial institutions have more confidence in the take-up rate of the reverse mortgage. The questionnaire is employed to examine the willingness to take up reverse mortgages and it found that most of the elderly are not ready to take up the reverse mortgage due to a lack of exposure and understanding of the product.