Wharton Pension Research Council Working Papers

Document Type

Working Paper

Date of this Version



Home equity represents a substantial share of retirement wealth for many older persons, particularly in Asia where national housing policies have encouraged homeownership. This paper explored the potential for reverse mortgages to help ‘asset-rich and cash-poor’ older Singaporeans unlock their home equity while ageing-in-place. The empirical analysis was based on a nationally representative survey of homeowners age 50+ in the 2018 Singapore Life Panel (N=6,258). Our analyses showed that the average older homeowner holds some 60% of total net wealth in housing equity, suggestive of high demand potential for reverse mortgage products. Nevertheless, actual interest in such products was much below potential demand. Only one in four older homeowners indicated interest in commercial reverse mortgages if these were to become available; a larger majority never heard of the financial product. Interest in reverse mortgages was positively associated with product awareness and self-rated product understanding. This implies that a critical step towards building consumer interest would be to enhance awareness of such products and simplify related contract terms. Having a mortgage, fewer children, financial literacy, and preparedness for retirement were also positively associated with interest level. These results have implications for targeted interventions to enhance consumer awareness and spur interest in reverse mortgages, especially in ageing societies where older people have built up substantial equity through the housing market over time.


Homeownership, Housing wealth, Financial literacy, Retirement policy

JEL Code

D14, G11, G21

Working Paper Number


Copyright/Permission Statement

All opinions are solely those of the authors. © 2020 Fong, Mitchell, Koh. All rights reserved.


This research was supported by the Singapore Ministry of Education (MOE) Academic Research Fund Tier 3 grant (MOE2013-T3-1-009) at the Singapore Management University, the MOE Tier 1 grant at LKY School of Public Policy at the National University of Singapore (MOE2018-T1-R603000296115), and the Pension Research Council/Boettner Center at The Wharton School of the University of Pennsylvania. The authors acknowledge excellent research assistance from Yong Yu.

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Economics Commons



Date Posted: 08 October 2020