-A stable cash flow from JTYK allows more spending on cultural activities and living expenses and contributes to the revitalization of the nation's economy

Korea Housing Finance Corporation (HF, CEO Kim Jae-Chun) announced on the 9th that its recent survey revealed
that around 40% of home-owning elderly households suffer from a shortage of monthly income and that such
income shortage could mostly be resolved by the regular income stream offered by the JooTaekYeonKeum
(JTYK) program. In particular, senior households aged 70 or older would be able to secure an income stream
equivalent to or greater than their income shortage through subscription to the JTYK program.

The 2015 JTYK Demand Survey was conducted to better understand how senior citizens lead their
post-retirement lives. The survey was held from July 3, 2015 to August 24, 2015 on 3,000 home-owning
senior households aged 60 to 84 and 600 elderly households that have taken out a JTYK reverse mortgage loan.
 * JooTaekYeonKeum (JTYK) is a state-guaranteed reverse mortgage loan in which senior citizens 60 years
of age or older provide their owned home as collateral and receive living expenses for their post-retirement
lives in the form of monthly pension benefits either for the rest of their lives or for a certain period of time.

□ JTYK supplements shortages of monthly income

 According to the survey, 38.9% of home-owning elderly households feel that their monthly income is not sufficient,
and most of their income shortages could be resolved with a JTYK loan. More specifically, the average monthly
income desired by home-owning elderly households is KRW 2.06 million, and their actual monthly income stands
at KRW 1.26 million, creating a cash shortage of KRW 800,000 each month. The survey found that the cash shortage,
however, can be reduced to KRW 120,000 if the elderly subscribe to a JTYK reverse mortgage program.
 
Particularly for senior citizens 70 years of age or older, a JTYK subscription will raise their monthly income t
o their desired level or even higher. This indicates that the older subscribers are, the more affluent
they can live with their participation in the JTYK program.

【Monthly Income Supplements Offered by JTYK Subscription】



【 The Average Monthly Income Shortages Faced by Elderly Homeowners】
                                                                                 (unit: KRW 10,000)

□ JTYK ensures a stable income stream for the elderly

 It was found that senior households that have taken out a JTYK reverse mortgage loan enjoy a stable stream
of monthly income even in their 70s or older thanks to the monthly JTYK payments. The share of 'JTYK payments'
in the total monthly income of JTYK-subscribing households is: the 60-to-64 age group (35.6%), the 65-to-69 age group
(44.9%), the 70-to-74 age group (56.2%), the 75-to-79 age group (62.8%), and the 80-or-over age group (69.8%).
This shows that as JTYK subscribers get older, the share of the JTYK payments in their total income increases.
For elderly households without JTYK subscription, their monthly income decreases as they get older, gradually
driving up the ratio of living expenses to their monthly income.

 


Seniors with JTYK subscription are also found to be more economically independent. The survey shows
that the share of financial support they received before JTYK subscription from their children or other family
members in their total income stood at 15.9%, while the figure went down to 5.3% after their JTYK subscription.
This decrease is attributed to the regular stream of monthly income provided by the JTYK loan.

□ JTYK allows more spending on cultural activities and living expenses and contributes to the revitalization of the nation's economy

 For the elderly who have insufficient monthly income (of KRW 1mn or less), a JTYK subscription can raise the ratio
of living and cultural expenses, such as medical services and travel, to their monthly income, contributing to boosting
the nation's economy. More specifically, 14.3% of the survey respondents said that they have experienced changes
in their leisure life after their JTYK subscription, and 60.7% of such respondents added that they have begun engaging
in new social activities such as meeting with friends and joining a club.
 



□ JTYK ensures a financially safe retirement by raising the retirement income replacement rate

 It is found that for senior households with JTYK subscription, 81.4% of their pre-retirement income
is paid out by the cash stream from the JTYK loan and other pension income (the figure stands at 21.1%
with public pension income before JTYK subscription). This number is about 40%p higher than the OECD
average of 40.6%, demonstrating that JTYK reverse mortgage loans ensure a financially safe retirement.



* The gross pension replacement rate of 81.4% represents the sum of the replacement rates provided by JTYK loans
(57.1%), the public pension scheme (21.2%), and private pension schemes and retirement benefits (3.1%).