4 ms·

Isn't this effectively what a reverse mortgage is in the US? You're given cash for your life up to the value of the home in exchange for the home when you pas

• mjh2539 5y ago
  It's more like an inverse life estate.
• fredophile 5y ago
  I don't believe these stop at the value of your home. It's as long as you're alive. For most people that means they'll get less than the value of their home but I've heard of one case where a person ended up living for a long time and the financial instrument being sold multiple times as a result. It's like insurance, on average the insurance company makes money but they can lose a lot of it on some individuals.
  • nly 5y ago
    The property value presumably increases as well though, so there's potential the buyer will come out ahead with the annuity payments even if they pay more nominally than current value
    • fredophile 5y ago
      Why does the property value increase? Property values can and do decrease or move sideways for long periods of time. The property value and the payments are completely independent.
• dragonwriter 5y ago
  > Isn't this effectively what a reverse mortgage is in the US? There are many kinds of reverse mortgage plans, including ones that are functionally similar to this. (But there are also lump sum, fixed payment term, and other variations that aren't.) And even the ones that are functionally similar are technically different, since technically they are loans that come due at death secured by the property rather than a sale contract.