"JTYK firmly established as a key source of post-retirement income for ordinary citizens"

With 5,296 new subscriptions in 2013, and 17,595 cumulative subscriptions since JTYK's launch;

3.2%p increase in the share of housing worth less than 300 million won compared to 2012

Offered by the Korea Housing Finance Corporation (KHFC), the JooTaekYeonKeum (JTYK) reverse mortgage loan has firmly established itself as a key source of income for retirees. The state-guaranteed scheme for reverse mortgage loans allows senior citizens aged 60 or above to hold their homes as collateral and receive monthly pension benefits―either throughout their life or for a certain period of time―to cover their living expenses after retirement.

KHFC announced on the 22nd that the number of new JTYK subscriptions from January through December 2013 stood at 5,296, up 5.6% from the 5,013 of the previous year. The cumulative number of subscriptions from its launch in July 2007 through the end of December 2013 amounts to 17,595.

Early-Subscription JTYK gains huge popularity

Launched in June last year, the Early-Subscription JTYK allows households owning a single home worth 600 million won or less, and whose registered owners are aged 50 or above, to use a lump-sum payment of up to 100% of their maximum pension benefits in repaying their existing mortgage loans and to continue to reside in their respective homes for the rest of their lives. The number of Early-Subscription JTYK subscriptions from its launch through the end of December last year was 393 (worth 545 billion won in total), accounting for 7.4% of JTYK subscriptions last year (5,296) and 12.8% of JTYK subscriptions during the same period (June through December 2013; 3,050).

The average JTYK subscriber joins the scheme at the age of 71.4 and receives 910,000 won per month with a house worth 275 million won

An analysis of JTYK subscribers in 2013 shows that the average JTYK subscriber is 71.4 years old (based on the age of the younger spouse in the case of married couples), owns a house worth 275 million won, and receives 910,000 won in monthly benefits, which amounts to 72% of the average earned income for households aged 60 or above (1.25 million won).*
* Source: National Statistical Office, Korean Statistical Information Service, Recent Statistics (3Q 2013) on Monthly Average Income/Expenditure per Household by Age of Householder

Average housing price of JTYK subscribers drops by 18 million won compared to 2012; 3.2%p increase in the share of houses worth less than 300 million won

The average housing price of JTYK subscribers in 2013 stood at 275 million won, down by 18 million won from 293 million won in 2012. The share of houses worth less than 300 million won increased by 3.2%p to 64.4% from 61.2% in 2012, due largely to an increase in subscribers from non-Seoul/Gyeonggi regions where housing prices are lower.

In terms of the size of houses held as collateral, those at or below the national housing size (85m²) accounted for 76.6%, growing slightly from 75.9% in 2012.

1,408 subscriptions from outside of Seoul and Gyeonggi Province, up by 22.3% from 2012

In 2013, 1,408 of the new JTYK subscriptions were made outside of Seoul and Gyeonggi Province, representing a 22.3% year-on-year increase from 1,151 in 2012.

"We have launched regional branches and pursued locally customized promotion, and our efforts to reach out to customers outside of Seoul and Gyeonggi Province seem to have paid off," says one KHFC official. "As the baby boom generation begins to retire and the population is aging rapidly, the demand for JTYK will continue to increase. We will make continued efforts to develop a wide range of products that can successfully address the ever-diversifying household consumption patterns in the face of a growing elderly population."