Hong Kong's growing elderly population could draw against the value of their homes without selling Elderly Hong Kong homeowners who are short on savings to fund their retirement may be able to remortgage their properties to produce a monthly pension - and continue to live in their homes. The Hong Kong Mortgage Corp (HKMC) yesterday said it had begun studying such a 'reverse mortgage' scheme to determine market demand and feasibility. 'It is quite a complicated product and we will need a bit of time to do the research, so we have no time-frame for introducing it at the moment,' HKMC senior vice-president Kenny Fok Tze-chun said. Reverse mortgages - which are also known as home equity conversion mortgages - allow home-owners to borrow an agreed amount against the equity in their properties. However, instead of making regular payments for the loan, they receive regular monthly instalments from the bank. When the home-owner dies, the bank will repossess and sell the property to recover the loan. Any surplus from the sale after the reverse mortgage has been recovered will be returned to the home owner's estate. 'The rationale for the reverse mortgage is that we are trying to target those elderly people with limited liquid assets apart from a residential unit, because they have spent a lifetime repaying the mortgage loan,' Mr Fok said. By re-mortgaging their homes, such elderly people could continue to live in their properties while drawing down the equity they had built up in their homes in the form of a monthly 'pension'. Such mortgages are available in the United States and Britain, with demand driven by changing demographics around the world. In Hong Kong, the Census and Statistics Department has noted what it called a 'continuing dejuvenation and ageing trend'. The median age of Hong Kong's population rose from 26 years in 1981 to 37 years in 2001 as a result of declining fertility and longer life-spans. Hong Kong's fertility had shown a marked and continuous decline over the past two decades, the department added, with the fertility rate falling by about 52 per cent from 1,933 live births per 1,000 women in 1981 to 927 in 2001. At the same time, there was a continuous decline in mortality during the 1981-2001 period, which has led to an increase in life expectancy. The expectation of life at birth for males rose from 72.3 years in 1981 to 78.4 years in 2000. This figure rose from 78.5 years to 84.6 years for females. With the number of aged increasing relative to the working population, as well as living longer, a need has arisen to provide retirement funding that was unforeseen two decades ago - and in many cases not planned for. Reverse mortgages have provided one source of this retirement funding. The chief drawback of a reverse mortgage is that all of the equity in a home might be extinguished. In a case such as this, there would be no value left in the property after the reverse mortgage had been totally recovered by the lender - and therefore no inheritance left over for the children.