The psychology and economics of reverse mortgage attitudes.Evidence from the Netherlands

Rik Dillingh (Tilburg University), Henriëtte Prast (Tilburg University), Mariacristina Rossi (University of Turin) and Cesira Urzì Brancati (International Longevity CentreUK) present and analyze the results of a survey on the attitudes toward reverse mortgages of homeowners aged 45 and over in the Netherlands. Respondents are randomly allocated to two different conditions regarding the suggested use of a reverse mortgage loan – personal consumption smoothing or financially supporting (potential) heirs. Results are analyzed using individual objective and subjective background characteristics as explanatory variables. Main conclusions are that few homeowners are aware of the concept of a reverse mortgage, a substantial fraction is very or quite interested – implying latent potential demand, and the suggested loan use influences attitudes.