I do not know how many of you are in the glorious situation of retirtement, being over 65 years old, but thought this information will be of interest for you, your relatives and/or friends.
If you are from the United Kingdom, you are fully familiar with this financing product which is used there since 1965, but I just wanted to let you know that there is also that possibility with your Spanish home as many Cajas and some Banks are know allowing the stablishment of this kind of loan on your second residency in Spain. That might help you a bit to cope with the crisis as a complement to your pension.... and maybe help yours.
The reverse mortgage is a mortgage loan intended for people over 65 years or dependent. The financial institution pays a guaranteed monthly amount which is guaranteed by the house. Heirs will not lose ownership of the house.
In Spain, the 22% of clients interested in reverse mortgages have houses located in Andalusia, mainly because the over supply of properties in that region
Some figures for correspondences between value of apartments and monthly rentals obtained with them:
A 250.000 € valued apartment will generate:
365 € per month for a 70 y/o man
333 € per month for a 70 y/o woman
647 € per month for a 80 y/o man
584 € per month for a 80 y/o woman
The reason for rent difference between men and women is that we, women, live longer, statistically.
The interest rate applied is around 6% and the repayment period varies between 12 and 15 years.
The reverse mortgage market began in Spain in 2004. At present, a total of 20 financial institutions are selling this product: Ibercaja, La Caixa, Caixa Sabadell, CAI, Caja Vital, Caixa Manresa, Caixa Terrassa, Caja G, Caja Navarra, Caixa Penedes, Caixa Girona, Caja de Ingenieros, Bancaja, Kutxa, Caixa Galicia, Sa Nostra, and BBK Caja Castilla La Mancha.
As for banks, BBVA is the only one which sells this product. Also an insurer, Catalana Occidente, launched its own reverse mortgage.
Together wth the United Kingdom, where this product has been used since 1965, other countries with a tradition in this type of products are the U.S., New Zealand, Canada and Australia.
Trafalgar beach by Jesu D' Alange at Flickr.com