Perspectives about Reverse Mortgage in Italy: a life-cycle model and quantitative evidences

We present a twofold analysis: we construct a life-cycle model to evaluate borrower’s decision problem, taking into account long-term care expenses and house maintenance costs. Exploiting a dynamic programming technique, we establish the optimal saving streams with and without RM. We perform a comprehensive quantitative analysis conducted among potential Italian subscribers to assess current levels of awareness and to identify the factors hindering access to this credit line.