Reverse mortgages and older people: growth factors and implications for retirement decisions

Abstract

This paper found that while there are many very satisfied holders of reverse mortgage products, the nature of the product and of the client group presents a number of risks. The research undertaken as part of this study indicates that a number of issues with the current operation of the reverse mortgage market could be improved. The biggest issue at the moment is one of the imbalances of information and hence power between the buyers and sellers of reverse mortgage products. Regulation directions could reduce risks for older consumers by ensuring the match between the available product choices and consumer need. A number of education strategies are suggested to improve the awareness of consumers. It is also suggested that an ongoing monitoring strategy be implemented so that the impact of any new measures can be evaluated.