英文摘要 |
Following the government of Taiwan's introduction of the concept of the reverse mortgage (RM), RMs have become available and been noticed in Taiwan since March 1st, 2013. Several financial institutions in Taiwan have also introduced different types of RMs. Studies on RMs mainly focus on pricing and hedging, the social-welfare effect, and policies. In this study, we establish a model to price RMs. In addition, we apply real option theory to estimate the optimal conditions under which a borrower should terminate a RM. This study provides a different analysis in terms of pricing an RM, and estimates the optimal house price at which the RM should be terminated. The empirical evidence shows that the likelihood of an RM being terminated is higher at the beginning of the duration of the contract. |