“₩2 million a month, paid like clockwork—why turn it down?” ... House-poor seniors say, “I should leave the house to my children”

[Financial News] People say that in old age, cash flow matters more than owning a home. More and more older people are struggling with poverty despite owning homes worth several billion won, because they lack money for immediate living expenses.
The Korean Home Pension (reverse mortgage) was introduced in 2007 to address this, but its take-up rate has yet to get beyond the 1% range. An improvement plan announced early this year to increase monthly payments has led to forecasts that the rate will top 2% for the first time, but in reality, the program still has not won the support of older people.

Data that Han Min-soo, a Democratic Party of Korea (DPK) lawmaker on the National Policy Committee, received from the Korea Housing Finance Corporation (HF) on the 3rd showed that the cumulative number of Korean Home Pension subscribers reached 162,498 through August this year. Based on the 7.73 million households eligible last year, the take-up rate was about 2.1%. Eligible homes have an officially assessed value of 1.2 billion won or less. With the official assessed prices of apartment complexes rising this year, the number of eligible households is expected to be similar to or slightly lower than last year's figure.
New subscribers totaled 14,580 in 2022, 14,885 in 2023, 14,670 in 2024 and 13,925 in 2025, remaining around 14,000 a year. This year, however, 12,427 people had signed up by August, nearing the usual full-year total.
HF said the Korean Home Pension reform plan introduced in February, which lowered the initial guarantee fee and increased monthly payments, had proved effective. As a result, monthly payments for new subscribers rose by an average of 3.13% starting in March, while the initial guarantee fee rate was lowered from 1.5% to 1.0% of the home’s value. The annual guarantee fee rate, meanwhile, rose from 0.75% to 0.95%.

A couple can sign up for the Korean Home Pension if one spouse is at least 55 and the combined officially assessed value of their homes is 1.2 billion won or less. Monthly payments are calculated based on factors such as market prices or appraised values. For a home worth 500 million won, a couple could receive about 1.05 million won a month if the younger spouse is 60. For the same home, the monthly payment would be about 1.54 million won at age 70 and 2.42 million won at age 80; the older the subscriber is when joining, the higher the monthly payment.
Expectations that home prices will rise further, particularly in the Seoul metropolitan area, and the belief that homes should be passed on to children are also obstacles.
HF said, “Older people hesitate to sign up because they believe they will lose out if home prices rise after they join the Korean Home Pension. There has been insufficient public awareness that increases in home prices are already factored into the calculation of monthly payments.” It added, “When the account is settled after the subscriber’s death, any increase in the home’s value is inherited by the bereaved family, but awareness of this is limited, and there are also misunderstandings about the program overall.”

The need to expand the Korean Home Pension stems from severe poverty among older people.
According to the report “Policy Linkage Measures to Improve Poverty Among Older People” published by the Korea Institute for Health and Social Affairs (KIHASA), the relative poverty rate among people aged 65 and older was 35.9% in 2024, more than twice the average for all households (15.3%). This means that one in three older people earns less than half the median income.
The Organisation for Economic Co-operation and Development (OECD) also said in a recent report that South Korea’s elderly poverty rate was 39.7%, putting it in the 30% range.
The population is aging rapidly as well. According to the U.S. Census Bureau report “An Aging World: 2025,” South Korea’s share of people aged 65 and older is projected to rise from 20.3% last year to 41% in 2060, making it the highest in the world.
Some experts say the program needs to be revamped to attract even older people who own homes in the Seoul metropolitan area or high-value properties—for example, by increasing monthly payments or factoring changes in home prices into the pension amount.
Rep. Han emphasized, “The Korean Home Pension is a key social welfare safety net that can safeguard older people’s housing stability while alleviating poverty in old age.” He added, “We should expand practical incentives, such as bringing payments in line with current realities, and lower the barriers further so people do not hesitate to sign up because of misunderstandings about home-price fluctuations or inheritance.”
[email protected] Kim Su-yeon Reporter