Number of JTYK Users Expected to Reach 145,000 in 15 Years

The JTYK demand forecasting model finds that the ‘house=inheritance’ perception persists and is an obstacle to the use of JTYK.

The number of JTYK loans, a government-guaranteed reverse mortgage loan, is forecast to reach 145,000 in about 15 years.

According to the 2008 JTYK Demand Survey report released by KHFC on September 21, a survey of senior citizens aged between 60~84 throughout Korea showed that only 17% of respondents were interested in using JTYK. Based on this figure, when potential demand of JTYK was calculated using a forecasting model (BASS model) considering the current eligibility for JTYK and the trends of the U.S. public reverse mortgage program, the total cumulative number of users of JTYK will surpass 10,000 households in 2013 and 100,000 households in 2022 and reach 144,729 households in 2024.

Since being launched in July 2007, JTYK was used by a total of 854 households in the first year. The number should rise steadily every year and reach 1,211 households in 2010, 5,662 households in 2015, and 11,665 households in 2018, and peak around 2022.

In a survey of senior citizens, 39% percent of respondents indicating reluctance to use JTYK said that the most important reason for their reluctance was to "hand down a house to my children". A total of 38.3% said that the "monthly payout of JTYK is smaller than expected," 22.8% cited "having enough funds for retirement," and 18.7% indicated "lack of confidence in JTYK." Respondents were permitted to give more than one answer. These figures imply that the deep-rooted perception on inheritance remains the biggest obstacle toward the widespread use of JTYK.

When asked about intention to hand down a house they are currently residing in, 87.2% of senior citizens answered they want to "hand down at least a part of it" or "hand down the entire house," showing a strong intention to hand down the house.

Those who made inquiries about JTYK but did not apply for JTYK were found to have discussed it with their spouses, sons, and daughters, in that order, in advance, but decided not to apply for JTYK primarily due to opposition by sons rather than spouses or daughters.