Retirement Mortgage: Home Loans For Over 50's

Retirement Age Home Loan

Did you know that many banks have lending policies that restrict the borrowing capacity of mature borrowers? If you are over the age of 40, the lender may shorten your loan term so that your home loan will be repaid before the standard retirement age of 65.

For those of you over the age of 50, loan approval is by no means certain. You may be required to provide extensive documents & an exit strategy so that the lender is sure that the loan will be repaid before you retire.

The secret to getting your home loan approved is to apply with a lender that has flexible policies.

How to get a home loan over 50 years of age?

There are three important steps to getting approval for a home loan if you are 50 years or older:

  • You must have a defined exit strategy (see below – exit strategy).
  • You must repay the loan prior to your retirement (see below – retirement rule).
  • You should apply with a lender that understands & accepts mature age borrowers.

Do you need help with your loan approval? Our mortgage brokers are experts in the policies of the major lenders. They know which banks have lenient lending guidelines for people over the age of 50.

Please call us on 1300 889 743 or enquire online and one of our mortgage brokers will contact you to discuss your situation.

How can you get your home loan approved?

Did you know some of our banks will allow you to borrow even if you are over 50 yrs old? If you can demonstrate an ability to repay the loan before you are 75 yrs old they will approve it no matter your age!

For example, if you needed to borrow $300,000 and were aged 50 yrs old, then instead of having a standard 30 year term, you could reduce this to a 25 year term and your loan would be approved.

Please call us on 1300 889 743 or enquire online and one of our mortgage brokers will assist you in applying for a mortgage.

Applying for a home loan over the age of 65

If you are still earning an income from shares, a business, rent or if you are still working, you may be able to get approval. However, we will need to show the lender that your income is ongoing. If you are still working, we may need to prove that you can continue to work until the loan is repaid.

If you have already retired and have no ongoing income, then you may be able to apply for a seniors equity release. This type of loan is designed for elderly borrowers who have significant equity in their home. No repayments are required and the interest capitalises until the property is sold. Because there is no requirement to repay, you do not need to comply with the retirement age policy or prove your income.

Please call us on 1300 889 743 or enquire online and one of our mortgage brokers will help you apply for a loan today!

Retirement age rules

Different banks have different policies for borrowers that are nearing the age of retirement:

  • 35 years old: At this age, lenders will consider your profession and likely retirement age and they may shorten your loan term.
  • 45 years old: At this age, you may be required to show superannuation statements or demonstrate that you have strategy in place to repay the loan when you retire.
  • 50 years old: Most lenders will allow you to borrow however some may decline your application due to your age.
  • 55 years old: Almost all lenders will require a written exit strategy, evidence of your superannuation and other assets that can be sold to repay the proposed debt.
  • 60 years old: Most banks are likely to decline your application due to your age. However, If you have a continuing source of income past retirement, or have assets you can sell to help repay the loan, then your loan may be approved.
  • 65 / 75 / 80 years old: You will only be able to borrow money with either a seniors equity loan (reverse mortgage) or with a standard loan, if you can prove an ongoing post-retirement income.

Do you need help with your loan approval? Our mortgage brokers are experts in the policies of the major lenders. They know which banks have lenient lending guidelines for people over the age of 50.

Please call us on 1300 889 743 or enquire online and one of our mortgage brokers will contact you to discuss your situation.

Bank policies for older borrowers

Banks require proof that you can repay the loan without hardship. If the loan term extends past your likely retirement age, then the bank has not met their responsible lending obligations under the National Consumer Credit Protection Act (NCCP).

However, the NCCP Act is open to interpretation! For this reason, each bank has their own requirements and rules for older borrowers. Many of the common policies include:

  • If your owner occupied property (home) is the sole security for the mortgage, you must provide a written exit strategy.
  • Downsizing to a smaller home is not an exit strategy that is accepted by most lenders.
  • If no exit strategy is provided then the loan term must not exceed the expected age of retirement. E.g. a 45 year old would be given a loan term of 20 years so that the loan was repaid by the time they turned 65.
  • The accepted retirement age varies between lenders, from 65 to 75 years of age.
  • Many lenders will not approve a loan for someone over a particular age, e.g. 60 years old.

Your mortgage exit strategy

The exit strategy that you prove to the lender can vary depending on your asset position, income and retirement plans. Common strategies include:

  • Downsizing to a smaller home when you reach retirement (not accepted by all lenders).
  • The sale of assets such as an investment property or shares.
  • Lump sum repayments from superannuation.
  • Ongoing income from superannuation.

Contact a specialist mortgage broker!

Do you need help with your mortgage? We specialise in helping people over the age of 50 get approval for a home loan.

Please contact us on 1300 889 743 or enquire online and one of our mortgage brokers will contact you to discuss your situation.