Reverse mortgage: a tool to reduce old age poverty without sacrificing social inclusion

▸ Homeownership is widespread, in Europe, particularly among older people, with even lowincome households holding a significant amount of housing wealth ▸ Because of the low liquidity of housing wealth, homeownership can create a mismatch between disposable income and capital. We argue that reverse mortgages – which convert housing wealth into a stream of income flows – could represent a powerful device against income vulnerability in old age ▸ This argument is supported by our (first) estimates that show that reverse mortgages could indeed play an important role in protecting older households against consumption shortfalls without displacing them from their home, thus contributing to their social inclusion. This is especially true for countries like Spain, Belgium, Italy and France 21.1