Key Takeaways
There is no maximum age for a home loan in Australia, but lenders must check you can repay without substantial hardship, now and after you retire.
If your loan runs past your expected retirement, most lenders will ask for an exit strategy backed by evidence, such as a super statement or sale plan.
Super pensions, rent, investment income and part-time work can all count, depending on the lender and your evidence.
A shorter loan term, a lower loan amount or a planned downsize can make approval more likely.
Plenty of people buy, refinance or upgrade in their late 50s and 60s, whether to move closer to family, renovate or make a tree change. Getting a home loan over 55 is often possible, and age itself is rarely the hurdle. What lenders want to see is how the loan will be repaid as your working years wind down.
Lender policies on retirement income vary a lot. One lender may count your super pension in full while another discounts it or doesn't accept it at all, which is why many older borrowers have a retirement home loan broker compare lenders before they apply.
Is There an Age Limit for a Home Loan?
No. Under the Age Discrimination Act 2004, a lender generally cannot refuse you a loan simply because of your age. What it must do is follow responsible lending rules.
The National Consumer Credit Protection Act 2009 requires a lender to make reasonable inquiries about your situation and confirm the loan is not unsuitable. For older borrowers, the focus falls on what happens to your income when you stop working, and whether the loan could leave you in substantial hardship later.
How Lenders Assess Older Borrowers
Lenders check the same basics as for any loan, then look closely at the years ahead, usually asking:
Can you afford the repayments on your current income?
When are you likely to retire, and how will your income change?
How much of the loan will still be owing at that point?
How will that remaining balance be repaid?
Having plenty of equity helps, but it only tells the lender the loan is well secured. It does not show you can afford the repayments.
Home Loan Exit Strategies for Retirement
If your loan will run past your retirement age, the lender will usually ask for an exit strategy. This is a written plan showing how the remaining balance will be repaid, backed by evidence such as a super statement or proof of an asset you plan to sell. Some plans carry more weight than others:
Strategies Lenders Often Accept
Repaying the loan before your planned retirement date.
Paying down the balance with a lump sum from super once you can access it.
Selling an investment property or shares.
Downsizing to a smaller home and using the sale proceeds.
Ongoing retirement income such as rent or a super pension.
A super lump sum only works once you can get to your super. That generally means reaching your preservation age, which is 60 if you were born on or after 1 July 1964, and then retiring or leaving a job. Once you turn 65, you can access it even if you keep working.
Clearing the loan with super can also change your Age Pension position. Your home is exempt from the assets test but super is counted, so using super to pay down your mortgage can lower your assessable assets. A Moneysmart retiree mortgage case study shows how this played out for one homeowner at 67.
Strategies Lenders Usually Reject
An expected inheritance.
Future pay rises or bonuses.
A pending legal or family law settlement.
Policies vary between lenders, so treat these lists as a general guide.
Retirement Income Lenders Accept
Retirees can qualify for a standard home loan, provided the income is reliable. Lenders look at where it comes from, how long you have received it and how long it is likely to last. Income that may count includes:
Account-based super pensions and annuities.
Rent from investment properties.
Dividends and other investment income.
Part-time employment or consulting income.
Government payments, including the Age Pension, with some lenders.
Expect to provide pension statements, investment records and recent tax returns. Having these ready early lets a home loan broker check which lenders accept your mix of income before an application goes in.
Ways to Improve Your Approval Chances
Most of what helps comes down to showing the loan fits your retirement timeline:
Choose a shorter loan term that ends near your retirement date.
Borrow less, or put more of your savings towards the purchase.
Pay off credit cards and car loans before applying.
Apply while you are still working, if retirement is close.
Document your exit strategy, such as a planned sale or super balance.
A shorter term does mean higher repayments, so it helps to see how a 25 or 30-year loan term changes the monthly cost before you settle on one.
If you already have a mortgage, it is usually easier to refinance before you retire, while pay slips still make your income simple to verify. Talking to a home loan refinancing broker in those last working years can give you time to look for a better rate or a term that ends closer to retirement.
Example of Buying a Home at 58
This scenario is a general guide only.
Helen is 58 and works full time as a practice manager in Wodonga. She plans to retire at 66 and wants to buy a $600,000 home in Albury, closer to her grandchildren.
She has $300,000 from selling her previous home, so she needs to borrow the other $300,000. A 30-year term would take the loan well past 66, so the lender asks for an exit strategy. Helen shows her current super balance and a plan to pay down most of the loan with a lump sum when she retires. She also opts for a shorter term, which cuts what is still owing when she stops work. Approval still depends on the lender's own assessment of her income and expenses.
Frequently Asked Questions (FAQs)
Can I get a 30-year home loan at 60?
It is possible, but less common. A 30-year loan taken at 60 would run until you are 90, well past most people's retirement, so the lender will want a credible exit strategy, such as a planned downsize, a super lump sum or ongoing retirement income. Many older borrowers choose a shorter term instead, which lowers the amount owing at retirement.
Will lenders count the Age Pension as income?
Some lenders do accept the Age Pension as income, but policies vary and many take a cautious view. The pension on its own may only support a modest loan once living costs are included, so it is more often counted alongside rent or a super pension. Age Pension age is 67, and Services Australia sets the eligibility rules. We can let you know which lenders currently accept it.
Can retirees refinance their home loan?
Yes, but the new lender will assess the loan as a fresh application, checking your current income, expenses and exit strategy. Refinancing can be harder once you stop working, and if you are already retired, the main hurdle is finding a lender that accepts your type of retirement income.
Is a reverse mortgage better than a standard home loan for retirees?
They suit different needs. A standard home loan needs regular repayments, so you must show enough income to meet them. A reverse mortgage does not require repayments while you live in the home, but interest compounds and the debt grows over time, which can reduce what is left for your estate or for aged care later. A standard loan usually costs less if you can service it, so it is worth comparing both carefully.
The Bottom Line
Age alone is rarely what stands between you and a home loan. What matters is a clear repayment plan, so before you apply, gather a recent super statement, your expected retirement date and details of any property or shares you plan to sell. That way, your loan term and exit strategy can be set together.
If you are weighing up a home loan in your late 50s or 60s, the team at Loan Street Finance can talk you through the options that suit your circumstances.
This article is general information only and does not take your objectives, financial situation or needs into account. You may wish to speak with a qualified professional before acting on it.