The Japan Housing Finance Agency (JHF) released on February 25th a consumer demographics press release for October to December of 2021 for their Reverse 60 program;  a reverse mortgage housing loan for people aged 60 and over.

The number of applications during the period was 458 units, up 44.0% Year-on-Year (YoY). 

The number of units lent on was 350 (up 41.7% YoY), and the amount lent was 4.74 billion yen (up 32.4% YoY). 

The number of financial institutions handling Reverse 60 loan applications was 79 institutions, up 14.5% YoY.

The average applicant was 69 years old and had an annual income of 4.14 million yen. 

Pensioners accounted for 50.2% of applicants.  The top use of funds was for "custom-built houses" (31.2%), followed by "refinancing an existing loan" (21.8%) and for "new condominiums" (21.6%). 

The average requested financing amount was 29.09 million yen, the average approved loan amount was 16.22 million yen, and average monthly repayment was 35,000 yen. 

The non-recourse loan was selected by borrowers 100% of the time.

What is a Reverse 60 Mortgage?

A Reverse 60 loan is a reverse mortgage where people who own their property can borrow against it to provide equity for funding a higher quality of life in retirement.  The JHF underwrites Reverse 60 loans that are issued by retail financial institutions.

According to the JHF Integrated Report for 2021, “Reverse 60 borrowers make monthly interest-only payments.  The loan principal is repayable in full after the borrower’s death.  The borrower’s heirs have the option of repaying the principal by using their own funds or by using the proceeds from selling the property loaned upon.  Because the monthly payments are interest only, they are lower than the monthly payments on an equivalent self-amortizing loan”

Further Reading

JHF Reverse 60 October to December 2021 Press Release (Japanese only; February, 2022)