The Greatest Benefit of the JTYK Loan is Lifelong Monthly Pensions

- Average monthly living expenses of a senior citizen household (60 years old or older) are about KRW 1 million -

- Before applying for the JTYK loan, senior citizens discuss it with their spouses, sons, and daughters, in that order -

A survey showed that the greatest benefit of the JTYK reverse mortgage program for senior homeowners is lifelong monthly pensions. When applying for the JTYK loan, senior citizens are most likely to discuss it with their spouses than anyone else.

Celebrating the fifth anniversary of the launch of the JTYK loan program, the Korea Housing Finance Corporation (KHFC, CEO Seo Jong-dae) conducted the "Survey on the Demand for the JTYK Loan 2012" to understand senior citizens' awareness and behaviors toward the JTYK loan and released its findings on August 30. The survey was conducted from April 23 through May 23 and covered 2,000 senior home-owning households in general and 600 households that currently have JTYK loans.

□ A benefit of the JTYK program is "a lifelong monthly pension. "

In the survey, 89.7% of senior homeowners in general and 93.5% of JTYK loan borrowers answered that the greatest benefit of the JTYK program is "lifelong monthly pensions." These figures are higher compared to 88.7% and 91.8% in the 2010 survey.

When asked of their reasons for applying for the JTYK loan, 90.0% of JTYK loan borrowers and 95.3% of senior homeowners in general answered "do not want to get support from children to pay for living expenses." Also, 85.3% and 67.6% answered "no other ways to raise money required for their later years."

□ When applying for the JTYK loan, they discuss it with spouse, sons, and daughters, in that order

The survey showed that 48.7% of JTYK loan borrowers discussed the loan with their spouses before applying for it. Then, they discussed it with sons (47.5%) and daughters (28.7%) or decided on it alone (23.2%).

Also, 78.7% of senior homeowners in general had intention to have their children inherit their houses, a slight decline from 79.1% in 2010 and down from 87.2% in 2008. In addition, 64.3% of JTYK loan borrowers were satisfied with the program. The satisfaction rate increased steadily from 45.5% in 2008 and 63.0% in 2010.

□ JTYK borrowers' average monthly living expenses are KRW 1.02 million

The monthly average living expenses of senior homeowners in general and JTYK loan borrowers were KRW 980,000 and KRW 1.02 million, respectively. A breakdown of monthly average spending showed that living expenses accounted for the bulk of spending for both senior homeowners in general (64.0%) and JTYK borrowers (68.0%), followed by medical expenses at 11.6% and 16.3%, respectively.

□ JTYK borrowers maintained stable income even when they get older

The survey showed that the monthly average income of senior homeowners in general was KRW 1.65 million, while that of JTYK borrowers was KRW 1.59 million. By age group, monthly income of senior homeowners in general dropped by over KRW 1 million from KRW 2.27 million in the 60~64 years age group to KRW 950,000 in the over 80 years age group. However, JTYK borrowers maintained rather stable income. It fell much less, from KRW 1.89 million in the 60~64 years age group to KRW 1.47 million in the over 80 years age group, indicating that JTYK borrowers secured stable monthly income regardless of age.

In particular, in the over 70 years age group, the income of JTYK borrowers surpassed that of senior homeowners in general. Dependency on the JTYK loan in monthly income was higher in the older groups, showing that the JTYK program was highly effective in maintaining income for senior citizens.

Senior citizens in general experience a sharp decline in their monthly average income and face increasing difficulty meeting their living expenses as they get older. However, JTYK borrowers are able to effectively maintain stable living as their income does not fall significantly even as they age.