Introduction: Locked Wealth of Central European Seniors
Slovakia has the highest homeownership rate in the European Union — 92% of households own their home. In Czech Republic it's 78%. Paradoxically, these very homeowners often struggle to live on their pensions.
Their wealth is "locked" within the walls of their homes. In the West, there's an elegant solution — reverse mortgage or equity release. In Slovakia and Czech Republic, this product practically doesn't exist.
In this article, we explore:
- Current market status in 2025 in Slovakia and Czech Republic
- How this market works in the UK, Germany, and USA
- Why our banks are behind
- What should change — and why HomeGrif is an alternative
Slovakia 2025: Zero Products on the Market
The situation is clear: no Slovak bank offers reverse mortgages in 2025.
Why?
1. Missing Legal Framework
Slovakia has no specific legislation for equity release products. The Mortgage Act (No. 90/2016) only covers traditional mortgages with regular payments.
2. Banks Consider It Too Risky
According to statements from several Slovak banks (including VÚB, Tatra banka, and SLSP), main concerns are:
- Longevity risk: Cannot precisely estimate how long clients will live
- Property price fluctuation: What if prices drop 30%?
- Reputational risk: Fear of negative publicity ("banks robbing pensioners")
- Product complexity: Requires different IT systems, training, processes
3. Small Market?
Slovakia has 5.4 million inhabitants. Banks argue the market is too small to justify developing a new product.
But this argument is flawed. Slovakia has approximately 1.2 million people over 60. If just 5% were interested in an equity release product averaging €100,000, we're talking about a €6 billion market.
Czech Republic 2025: Single Non-Bank Provider
The situation in Czech Republic is slightly better — but only marginally.
Since 2018, FINEMO.CZ offers "zpětná hypotéka" — not a bank, but a specialized financial institution. They operate exclusively in Prague and surroundings.
How FINEMO Works:
- Minimum age: 60 years
- Only properties in Prague and Central Bohemian region
- Payout as lump sum or installments
- Interest around 8-10% annually (higher than regular mortgage)
- Debt repaid after death from property sale
Why Czech Banks Don't Offer Equity Release?
Same reasons as Slovakia:
- Czech National Bank has no specific regulation for this product
- Banks fear reputational risk
- Product requires different business model (long-term commitments without payments)
United Kingdom: Mature Market with 40-Year History
The UK is the European leader in equity release.
Numbers for 2024-2025:
- £636 million (approx. €750M) — new contracts value in Q2 2025
- 10% year-on-year growth
- 36,800 new clients annually
- Average value: £117,000 (€138,000)
Main Products:
- Lifetime Mortgage: Most common. Bank lends 20-50% of property value. Interest compounds. Repayment only after death or when moving/selling.
- Home Reversion: Sell part of property (e.g., 50%) for lump sum or annuity. Stay living rent-free for life.
Regulation and Consumer Protection:
- All products regulated by Financial Conduct Authority (FCA)
- Mandatory independent financial advice before signing
- "No Negative Equity Guarantee": Debt never exceeds property value — children don't inherit debt
- 14-day cooling-off period
USA: Home of HECM — World's Largest Market
The United States has the most developed reverse mortgage market in the world.
HECM (Home Equity Conversion Mortgage):
- Federally insured product since 1988
- Guaranteed by Federal Housing Administration (FHA)
- Maximum limit in 2025: $1,149,825
Global Numbers (2024-2025):
- Total global market: $17.1 billion
- USA represents 54% of market
- Expected growth: 5.8% CAGR to 2033
- Expected market size in 2033: $28.9 billion
Why USA Leads:
- Government support: HECM is federally insured — banks have no risk
- 60 years of history: First reverse mortgage in USA was in 1961
- High property prices: Median US home price is $420,000
- Culture: Americans see homes as investment, not just shelter
Comparison Table: SK, CZ, UK, DE, USA
| Country | Availability | Regulation | Market Size | Main Provider |
|---|---|---|---|---|
| 🇸🇰 Slovakia | ❌ Unavailable | None | €0 | — |
| 🇨🇿 Czech Republic | ⚠️ Limited | No specific | ~€10M | FINEMO.CZ |
| 🇬🇧 United Kingdom | ✅ Developed | FCA, ERC standards | ~£6B | Aviva, Legal&General |
| 🇩🇪 Germany | ⚠️ Growing | BaFin oversight | ~€500M | DKB, HVB |
| 🇺🇸 USA | ✅ Most developed | FHA/HUD HECM | ~$9B | Finance of America, AAG |
What's Blocking CEE Banks? Deep Analysis
1. Regulatory Uncertainty
Unlike UK (where FCA clearly defines rules) or USA (where HECM has federal guarantee), in Central Europe:
- NBS and CNB have no guidelines for equity release products
- Banks would have to "improvise" in a gray zone
- Risk that regulator later changes rules retroactively
2. Basel III/IV Capital Requirements
Reverse mortgage is a very long-term asset (10-25 years) without regular payments from bank's perspective. This means:
- Higher capital requirements
- Lower liquidity
- More complex ALM (asset-liability management)
3. No Secondary Market
In USA, banks can sell HECM portfolios on secondary market (Ginnie Mae guarantees). In Europe, no such market exists — banks must hold loans until maturity.
4. Cultural Factors
- Strong tradition of "passing the house to children" in SK/CZ
- Stigma: "Whoever sells their house is desperate"
- Distrust of financial products (voucher privatization legacy)
Recommendations for Central European Banks
What NBS and CNB Should Do:
- Create regulatory sandbox for equity release products
- Define minimum standards for consumer protection (similar to UK ERC)
- Allow pilot programs with limited number of clients
What Banks Should Do:
- Start with Leibrente model: Simpler than classic reverse mortgage. Bank buys property with lifetime occupancy right.
- Partnership with insurers: Longevity risk is better handled by insurers (life insurance works inversely)
- Target high-end segment: Start with properties above €300,000 in Bratislava and Prague
- Educational campaign: Cooperation with financial advisors and senior organizations
Or: Partner with HomeGrif
HomeGrif offers an alternative that bypasses many barriers:
- No loans: We're not a bank, we don't offer loans — we offer sale with lifetime occupancy
- Transparent model: Senior knows exactly what they get and what they give up
- Investors bear the risk: Not the bank, but private investors
- Flexibility: Monthly annuity, lump sum, or combination
Outlook to 2030
What We Expect:
- 2025-2026: First pilot projects in CZ (likely ČSOB or Komerční banka)
- 2027: Possible legislative changes in CZ
- 2028-2030: Gradual product entry to Slovak market
Change Catalysts:
- Population aging (by 2030, 25% of Slovaks will be over 60)
- Pressure on public finances — state won't be able to increase pensions
- Entry of fintechs and non-banks (like HomeGrif)
- Examples from neighboring countries (Poland, Hungary experimenting)
Conclusion: Don't Wait for Banks
Slovak and Czech banks don't offer equity release products in 2025 — and this probably won't change in the coming years.
If you're 60+ and own a property without mortgage, you have these options:
- Wait for banks: Maybe in 5-10 years they'll offer something
- Sell and move: Loss of home and social connections
- Rent a room: Loss of privacy, low returns
- Use HomeGrif: Stay home, get annuity, help children now
HomeGrif is not a bank. We're an innovative platform bringing the Western equity release concept to Central Europe — without waiting for slow regulatory changes.
👉 Calculate your annuity — takes 2 minutes and is non-binding.
Sources: Equity Release Council UK, Federal Housing Administration USA, FINEMO.CZ, National Bank of Slovakia, Czech National Bank, Eurostat, Allied Market Research (Reverse Mortgage Market Report 2024)