Old can live free - Reverse Mortgage Plan

National Housing Bank (NHB) is planning to launch REVERSE MORTGAGE PLAN which will be targetted towards providing loan to retired senior citizens who own a property but have no means of income.

Such properties shall be evaluated at current market price and senior citizens may then get loan and exercise option of lumpsum payment or monthly payments. Loan shall be proposed for fifteen years and may be refinanced.

It comes close to becoming a social security mechanism for senior citizens who own a house. After fifteen years, payments shall stop and senior citizens and their spouses can stay in their home but to retain ownership, they shall have to repay the loan amount though without any interest.

Singapore considers monthly payments over reverse mortgage products as loan and not income. RBI's nod is awaited before this scheme actually gets launched.