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The social and economic effects of introducing reverse mortgages in Chile
- Source: CEPAL Review, Volume 2019, Issue 129, Dec 2019, p. 221 - 244
- Spanish
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- 20 May 2020
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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 homeowners 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%.
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