《TAIPEI TIMES》 Mortgage numbers for seniors surge to historic peak

Commercial and residential architectural drawings in Taipei on June 27. Photo: CNA

By Xu Yiping and William Herrington/Staff reporters, plus staff writer

According to the latest available sample data, the number of mortgage loan borrowers over the age of 65 in Taiwan exceeded 61,600 at the end of last year, the highest number since records began in 2009.

Please read on...

As of December last year, the mortgage data set of the Chung Lian Information Center contained nearly 1.51 million outstanding mortgage cases, of which more than 61,600 involved borrowers over the age of 65, accounting for approximately 4.08% of the total.

This number represents an increase of 6,900 transactions from nearly 54,700 transactions in the same period last year, an increase of more than 12%.

The number of mortgage loans for borrowers over the age of 65 has more than tripled in the past decade, from about 19,500 in December 2016 to the current level.

The number of new mortgage cases involving borrowers over the age of 65 also remained at a relatively high level. In the second quarter of each year from 2017 to the present, the number has risen from a low of 477 in 2017 to a high of 1,950 in 2022, the second highest of 939 in 2024, and the latest data in the second quarter of this year is 547.

Zeng Jingde, manager of the real estate research office of Xinyi Housing (Xinyi Housing), said that the number of senior housing loan borrowers is huge.

Some people may need a loan to obtain financing or buy another home, but it's unclear whether the trend is related to reverse mortgages, he said.

Banks' willingness to lend to older borrowers also shows confidence in their ability to manage loan risks, Zeng added, adding that he believed the trend was unlikely to cause problems.

Huang Shuwei, director of the tenant representation service department of Zhonglian, said that banks generally consider the age of the borrower and the loan term when evaluating loan applications.

Many banks set the sum of the borrower's age and loan term at 75 to 80 years as a reference standard for risk management, but the actual repayment period still depends on the bank's lending policy, the borrower's income and repayment ability, he said.

Taiwan's move toward a super-aged society, coupled with the postponement of the retirement age, the increase in the number of elderly people returning to the workplace, and the increasingly diversified sources of income, are challenging the traditional method of assessing mortgage repayment ability, Huang Shuwei said.

For wealthy borrowers, loans are increasingly being used for purposes other than home purchases, extending to broader asset allocation and wealth inheritance planning, Huang Shuwei said.

However, only outstanding debts that meet the requirements of tax law and are supported by adequate documentation can be deducted from the taxable value of the estate. Simply borrowing money does not automatically reduce your estate tax liability. Tax authorities are especially likely to scrutinize loans incurred in old age or during serious illness, including the reason for the loan, the flow of funds and their actual use, Huang Shuwei said.

In addition to reverse mortgages and trusts, the large amount of real estate and financial assets accumulated by Taiwan's post-World War II baby boomers are gradually entering the stage of wealth inheritance, Huang Shuwei said.

How the financial sector redesigns lending, asset revitalization and wealth inheritance vehicles will be a key challenge in the next phase, he added.

News source: TAIPEI TIMES

No need to draw, no need to grab. Now use the APP to read the news. You are guaranteed to win every day. Click me to download the APP. Click me to see the event details.