Mortgages for Over 50's, 60s & Elderly

Are you over 50 and thinking about taking out a home loan or thinking of refinancing your mortgage , but worried you’ll be turned away because of your age?

Don’t let age be a barrier as it is definitely possible to take out a loan regardless of how old you are.

Generally speaking, lenders do view mature aged mortgage applicants as higher risk borrower so they have stricter lending requirements.

It’s a good idea to be aware of what these are so that you’re well prepared when it comes to applying for a mortgage.

To begin with, let’s take a look at reasons why you may want to apply for a home loan later in life as lenders will take this into consideration.

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1. Renovations or upgrades

You may have lived in your home for several years and decided that it’s time to move on. In order to do so, you may need to add to your home loan or take out a new one.

2. Debt consolidation

Refinancing allows you to consolidate debts such as car loans, credit cards or personal loans, which could save you money.

3. Life changes

Has your family situation changed? Perhaps your family has grown and the children have grown up and left the family nest. A change in circumstances is a common reason to take out a new loan.

Regardless of age, lenders always look at your current financial situation to assess your home loan application. Lenders can’t discriminate on age, but if you’re mature aged and close to retirement, they will want to know you have a plan for how you will support yourself financially.

In addition, they may require you to demonstrate an exit strategy that outlines how you will pay off the loan or prove you can service the loan during retirement.

You can minimise the time you’re in debt by asking for a shorter loan term.

It’s important for you to work out what your income streams will be when you retire and whether that will allow you to pay off a home loan. Some examples of income may include: your superannuation; revenue from a diversified share portfolio and other assets. Whatever the income is, ensure it’s sustainable and consistent in order to prove you can continue to service the loan in retirement.

Reverse mortgages

If you're looking to borrow money in retirement, a reverse mortgage may allow you to use the existing equity in your home to act as security for a new loan, rather than relying on a regular income stream.

A reverse mortgage allows you to take a loan as a lump sum, an income stream or a line of credit without having to make repayments while you live in the home.
Like a normal loan, interest continues to be charged on the sum, but unlike a normal loan, a reverse mortgage (including interest and fees) is usually repaid in full when your home is sold, you pass away or, most commonly, you move into aged care. Download our factsheet for answers to the frequently asked questions surrounding reverse mortgages here.

You should not let your age be a deterrent to applying for a home loan. Your local Mortgage Choice broker can take the stress out of the process by exploring your options and finding the right product for your financial situation.

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Posted in: Home loans