KHFC releases a reverse mortgage product with a fixed payment period offering a higher

monthly payment than the lifetime payment type

- Subscribers can choose a payment period from 10 to 30 years in increments of 5 years

- With the new product, subscribers can receive up to 80% more in monthly payments than the existing lifetime payment type

- Guarantees lifetime residence in applicants' own houses even after the monthly payment period expires

On Nov. 29, the Korea Housing Finance Corporation (KHFC, President & CEO Seo, Jong-dae) is set to release a reverse mortgage product with a fixed payment period. This product allows applicants to receive higher monthly payments than the existing lifetime payment product, while guaranteeing lifetime residence in the present house.

According to KHFC on Nov. 28, the fixed-payment-period reverse mortgage allows applicants to choose the monthly payment period based on individuals’ income level and spending plans in their later years. The payment period options are between 10 and 30 years in increments of 5 years, and the shorter the payment period, the higher the monthly payment. Moreover, applicants are guaranteed lifetime residence in their own home for both members of the couple, the same as the lifetime payment type, even after the payment period is over.

However, in order to guarantee the stable livelihood of applicants in their old age and raise the effect of increased monthly payments, there are limitations in the ages eligible for the fixed-payment-period product and the payment period options available by ages. In addition, 5 percent of the lending limit is reserved for use only for medical and house maintenance expenses after the payment period expires. This is to ensure that the applicants can meet essential financial and house maintenance needs even after the payment period. Forty-five percent of the lending limit, except for the above 5 percent, will be available for the applicants to set as the withdrawal limit as necessary, which can be used at the applicants' discretion.

An official with KHFC explained, “The fixed-payment-period product will largely serve the needs of those in their 60s to 80s who tend to need more living expenses, and it will guarantee the stability of their minimum livelihood. Therefore, it will be a good option for those in their early old age who are relatively more active.” “With the growth of the aging population, the spending patterns of households are becoming more diverse, and KHFC plans to continue to develop products that can meet the needs of our customers to expand their options,” the official added.

For more information, contact KHFC’s call center (1688-8114) or local branches (see the KHFC website for details).