Elderly in China agonise over whether to take reverse mortgages

Like many elderly mainlanders, Zhang Yueqin has mixed feelings about the prospect of selling a share of her home to the bank for a monthly payment.

On one hand, the 78-year-old widow from Huaian city, Jiangsu province, must find some way to supplement the meagre 600 yuan (HK$757) pension she receives from the government each month. On the other, she feels uncomfortable knowing that each payment would decrease her children's inheritance.

So-called reverse mortgages pose similar dilemmas for elderly homeowners the world over. But Zhang is grappling with another, acutely Chinese concern: The deep-seated belief that parents have an obligation to leave something behind when they die.

Almost all of Zhang's wealth is locked in her 80-square-metre flat, valued at about 450,000 yuan (HK$568,000).

"How can I tell my children I want to mortgage the property which I originally planned to leave to them," said Zhang, who is currently cared for by her daughter and son-in-law. "As they take care of me, I think I should leave them the property."

Zhang's case illustrates the problem that the central government faces as it considers promoting reverse mortgages - or "home-for-pension" schemes - as a possible way to provide for the country's ballooning elderly population.