“ JTYK Establishes as an Alternative Income Source for the Elderly ”

- JTYK borrowers are 72 years old on average, their average house price is KRW 280 million,

and their average monthly pension benefit is KRW 1.03 million

There were 1,633 new JTYK borrowers in the first quarter of 2013, a 24.3% increase year-on-year

JooTaekYeonKeum (JTYK, government-guaranteed reverse mortgage), which provides lifelong pension benefits based on a single house, is winning accolade from senior citizens as an effective means to provide income in their golden years.

The Korea Housing Finance Corporation (KHFC) announced on April 10 that there were 1,633 new borrowers of the JTYK loan in the first quarter of 2013, which represents an increase of 24.3% from 1,314 in the same period of 2012. The total number of JTYK borrowers since its launch in July 2007 reached 13,932 by the end of March this year.

The popularity of the JTYK program may be attributable to effective word-of-mouth publicity thanks to its advantage of lifelong residence and lifelong pension benefits. Moreover, senior citizens who have experienced difficulty paying for their living expenses due to the prolonged period of low interest rates on their other investment means seek to secure stable cash streams on the real estate properties they own.

Average age of JTYK borrowers is 72 years old; their average monthly pension benefit is KRW 1.03 million; and their average house price is KRW 280 million. The JTYK program mainly supports low- and middle-class senior citizens.

The average age of those who took out JTYK loans since its launch through the end of the first quarter of 2013 is 72 years. They receive a monthly pension benefit of KRW 1.03 million on average. Their house price is KRW 280 million on average. Most JTYK borrowers were low- and middle-class people who own houses smaller than 85m2 and valued less than KRW 600 million. Houses valued less than KRW 600 million accounted for 93.7% and houses smaller than 85m2 accounted for 77.2%, indicating that the JTYK played a crucial role in covering living expenses for low-income senior citizens.

The average age of JTYK borrowers continues to drop as people are generally retiring younger

The average age of JTYK borrowers has continued to fall: It was 73 years in 2011, 72 in 2012, and 71 in the first quarter of 2013. In 2011, the borrowers in their 60s accounted for only 30.6% of all borrowers, but the corresponding percentage rose sharply to 44.2% by the first quarter of 2013.

“Because the baby-boomers are beginning to retire in full scale and the real economy has remained sluggish, relatively less aged retirees are also considering the JTYK program as an alternative to their post-retirement income source. KHFC will continue to improve the program in such ways as lowering the eligible age to allow retired senior citizens who are short of income to enjoy the benefits of the JTYK pension,” said an official at KHFC.