Understanding and Attitudes Toward Reverse Mortgage in Italy: Cognitive Dissonance and Future Concerns

Reverse Mortgage (RM), known as Prestito Ipotecario Vitalizio (PIV) in Italy, is an alternative financing solution aimed at individuals aged 60 and above who typically lack access to conventional credit lines. Subscribing the RM allows elders homeowners to convert part of their home’s equity into a lump sum or periodic payments preserving the right to live in the house and, differently from the bare ownership, without losing any legal rights on the property. The loan, along with accumulated interest, has to be repaid only when the borrower dies, sells the home, or permanently moves out. The Non-Negative Equity Guarantee (NNEG) protects the heirs by ensuring that, if the property’s value at the time of loan repayment is insufficient to cover the outstanding debt, no additional amount is required. Despite its availability in the Italian market for several years, RM remains a relatively underutilized financial instrument. To assess current levels of awareness and identify the barriers limiting access to this property-linked financing option, we present some preliminary results obtained conducting a comprehensive qualitative and quantitative research study among potential Italian subscribers, which takes into account individuals’ future concern about economic sustainability, their understanding and knowledge of supplementary pension products with priority over RM and actual interest in or use of the product. The objective is to provide meaningful insights into Italian perception of the Reverse Mortgage offering guidance for policymakers aiming to incorporate this tool into broader social and economic policy strategies.