The Scope of Reverse Mortgage in India

Abstract

Owning a house is what usually people will do as a wealth building measure. When one retires and the flow of income changes, this house equity one builds will serve as a financial resource. Now a day's reverse mortgage is becoming more popular product of banks in India. This concept of loan for the elderly people has come from US, where this product is major revenue for all most all the banks. Because of its structure, the reverse mortgage can be very relevant for the asset rich , cash poor individuals and those retired persons to supplement their income. In India, the potential market is very significant. India is following the demographic transition pattern of all developing countries from initial levels of "high birth rate high death rate" to the current intermediate transition stage of "high birth rate low death rate" which leads to high rates of population growth, before graduating to levels of "low birth rate low death rate".