South Korea will lower the age eligible to apply for the government guaranteed reverse mortgage program from 60 to 55.
Finance Minister Hong Nam-ki announced during a meeting with economy-related ministers on Wednesday that in order to provide income security for seniors, homeowners aged 55 or older will be eligible to apply for the government backed reverse mortgage.
Currently, the program is only available for homeowners aged 60 or older.
The government will also allow properties of a slightly higher value to be eligible for the program.
The government-backed reverse mortgage program for seniors, the so-called JooTaekYeonKeum is for homeowners without a big enough monthly cashflow in their elderly years.
By collateralizing their home for the loan, seniors can create cash flows by receiving regular monthly payments throughout the rest of their lives.
This reverse mortgage program is attractive for seniors in South Korea because both the borrower and spouse can reside in their home while receiving payments.
Also, since the monthly payment is backed by the government, there is little risk of it being discontinued.
The change in the policy follows an increase in South Korea's average life expectancy.
Hong also announced that eligibility for the retirement and personal pension plan will be expanded.
Eum Ji-young Arirang News.