Research On Development Mode Design And Product Pricing Of Housing Reverse Mortgage Pension Financial Products

With the increasing aging of our society, the traditional family pension mode andthe current social security system has been difficult to deal with increasingly appearedpension crisis. So to explore new pension model that suitable for China’s nationalconditions and can effectively alleviate the social pension pressure is inevitable line.Housing reverse mortgage that created based on housing endowment ideas has beendeveloped in foreign countries as a mature pension financial innovation. It is in thisbackground，was introduced into the domestic and responded with a greater expectationby experts and scholars. However, the population environment, economic and societyenvironment and legal system are quite different between China and major developedcountries, which we cannot copy foreign practice, but should discover out the housingendowment development mode that in line with our national conditions based on thebeneficial practices from abroad. On the other hand, the reasonable pricing of productsis the key to the successful implementation of the housing endowment business becauseit is directly related to the feasibility and enthusiasm of borrower to apply for thebusiness, as well as lending institutions to set up the business. The paper will continueto explore to solve the critical technical issues on the basis of the study results ofprevious to promote the Housing Endowment business to implement in China as soon aspossible.Starting from the aging trend in China, the paper describes the researchbackground and significance, and explains the meaning and function of housing reversemortgages development and related theoretical foundation system. After a detailedintroducing and careful summary of the development process, experience and lessonsand general rule of Housing Reverse Mortgages in the developed countries, the paperput forward the three-stage development mode of Housing Endowment combined withthe trend of economic and social development that shall be implemented by thegovernments’ leading to governments’ supporting, and then to complete market-orientedand securitization.On the basis of three-stage development model of Housing Endowment andcombined with the reality needs in our country，the paper gives the market segmentationon the target population and the mainstream products forms in the different stages ofdevelopment, and last respectively gives the product pricing model of fixed-term, having right of redemption and no right of redemption Housing Reverse Mortgage.Particularly, in considering the impact of inflation, the paper gives the fixed-termreverse mortgage product pricing method for progressive payment. By the effectiveselection for development models and related products through various stages, as wellas the reasonable assurance of different pricing methods for Housing Reverse Mortgageproduct, it will get rid of the key technical issues in the development in our country, thuspromoting the business of the Housing Endowment to land and implement early.The paper is both the further research and improvement in theory on HousingReverse Mortgages, but also the process arrangements and exploration of differentproducts’ pricing to the concrete practice of the business. So it can provide useful ideasand reference on the theory and practice for the relevant government when they makeHousing Reverse Mortgages mode selection and policy makers.