“JTYK monthly payments to be adjusted for new subscriptions from February”
- Date 2016-01-22
- Views 571
- JTYK eliminates the existing incremental and decremental payment plan options and allows switching
between payment plan options -
between payment plan options -
□ HF adjusts its JTYK monthly payments from February in response to changes in house prices and other key
variables
Those who apply for the JooTaekYeonKeum (JTYK) reverse mortgage program from February 1, 2016, onwards
will receive an adjusted amount of JTYK monthly payments. Existing JTYK subscribers and retirees who
complete their JTYK subscription by the end of this month, however, can receive the same amount of monthly
payments as before.
Korea Housing Finance Corporation (HF, CEO Kim Jae-Chun) announced on January 22, 2016, that it obtained
approval from the Housing Finance Steering Committee on December 18, 2015, to adjust key variables that
determine its reverse mortgage payouts after expert consultation on its proposed changes to the variables, and
that it will apply the adjustment starting from February 2016.
During the period of expert consultation, HF commissioned independent expert advisory groups to recalculate*
key factors that decide its reverse mortgage monthly payments, such as the rate of increase in home prices
and life expectancy. The adjustment will lower the monthly payments for those in their 60s and 70s with an
ordinary home mortgaged for a fixed payment plan option by 0.1% and 1.4%, respectively. For those
mortgaging their private senior residences, the amount of monthly payments for those in the same age groups
will go up on average by 2.3% and 0.6% each.
* According to Article 9 of the Korea Housing Finance Corporation Act, the key variables are subject to
recalculation at least once a year and their recalculated values should be reflected in determining HF's reverse
mortgage monthly payments.
□ Existing JTYK subscribers and new subscribers up until the end of January will receive the current amount of
monthly payments
The adjustment will apply to those who subscribe to the JTYK program from February 2016 onwards. The
existing subscribers and new subscribers up until the end of January will receive the monthly payment
predetermined at the time of their subscription.
<Changes to JTYK Monthly Payments>
(ordinary homes, fixed monthly lifetime payout, unit: KRW 1,000)
variables
Those who apply for the JooTaekYeonKeum (JTYK) reverse mortgage program from February 1, 2016, onwards
will receive an adjusted amount of JTYK monthly payments. Existing JTYK subscribers and retirees who
complete their JTYK subscription by the end of this month, however, can receive the same amount of monthly
payments as before.
Korea Housing Finance Corporation (HF, CEO Kim Jae-Chun) announced on January 22, 2016, that it obtained
approval from the Housing Finance Steering Committee on December 18, 2015, to adjust key variables that
determine its reverse mortgage payouts after expert consultation on its proposed changes to the variables, and
that it will apply the adjustment starting from February 2016.
During the period of expert consultation, HF commissioned independent expert advisory groups to recalculate*
key factors that decide its reverse mortgage monthly payments, such as the rate of increase in home prices
and life expectancy. The adjustment will lower the monthly payments for those in their 60s and 70s with an
ordinary home mortgaged for a fixed payment plan option by 0.1% and 1.4%, respectively. For those
mortgaging their private senior residences, the amount of monthly payments for those in the same age groups
will go up on average by 2.3% and 0.6% each.
* According to Article 9 of the Korea Housing Finance Corporation Act, the key variables are subject to
recalculation at least once a year and their recalculated values should be reflected in determining HF's reverse
mortgage monthly payments.
□ Existing JTYK subscribers and new subscribers up until the end of January will receive the current amount of
monthly payments
The adjustment will apply to those who subscribe to the JTYK program from February 2016 onwards. The
existing subscribers and new subscribers up until the end of January will receive the monthly payment
predetermined at the time of their subscription.
<Changes to JTYK Monthly Payments>
(ordinary homes, fixed monthly lifetime payout, unit: KRW 1,000)
Home Price Age |
100,000 | 300,000 | 500,000 | |||||||
Before | After | Change | Before | After | Change | Before | After | Change | ||
Ordinary Home | 60 | 227 | 227 | - | 683 | 682 | ▽1 | 1,138 | 1,137 | ▽1 |
70 | 329 | 324 | ▽5 | 986 | 972 | ▽14 | 1,644 | 1,621 | ▽23 | |
Senior Residence | 60 | 174 | 177 | 3 | 521 | 534 | 13 | 869 | 889 | 20 |
70 | 269 | 271 | 2 | 807 | 811 | 4 | 1,345 | 1,352 | 7 |
Those who subscribe to the JTYK program from this February will be able to switch between its payment plan
options. Up until now, the program has not allowed subscribers to change the option which they chose at the
time of their subscription (JTYK offers the fixed, incremental, decremental, or high-low payment options).*
However, HF has added some changes to the existing system by allowing new subscribers to switch beginning
from this February. Another notable change is the discontinuation of its incremental and decremental payment
plan options from this February. As a result, from next month, new subscribers will be able to change their
payment plan one time within the first three years of their subscription.
※ JTYK Payment Plan Options Fixed Option: Fixed monthly payments to be given for a predetermined period of time Incremental Option: The amount of monthly payments to increase at 3% each year (discontinued) Decremental Option: The amount of monthly payments to decrease at 3% each year (discontinued) High-Low Option: The amount of monthly payments from the 11th year onwards to be reduced to 70% of the initial 10 years' monthly payments |