Home loans for older borrowers: age, loan terms and retirement
Yes, you can get a home loan in your 50s, 60s or 70s. The Age Discrimination Act 2004 makes it unlawful for a lender to refuse you a loan, or set its terms, because of your age, unless the decision is based on actuarial or statistical data that it is reasonable to rely on. What lenders must check is whether you can repay without substantial hardship, including after you retire, so expect questions about how you'll repay the loan once you stop work.
This page explains what the law and ASIC's responsible lending guidance (RG 209) say about age and retirement, what lenders will ask, how a long loan term can still work, and the options if a standard loan doesn't fit, such as downsizing, a reverse mortgage or the government's Home Equity Access Scheme.
By Better Rate Mate Editorial Team · Last reviewed
Can a lender refuse a home loan because of your age?
Not on age alone. The Age Discrimination Act 2004 makes it unlawful for anyone providing services, which the Act says includes loans, credit and finance, to discriminate against you because of your age by refusing the service, or in its terms or the way it is provided. There is a specific exemption for credit: a lender may refuse credit or set different terms because of age if the decision is based on actuarial or statistical data on which it is reasonable to rely, and is reasonable having regard to that data.
In practice the deciding question is affordability. Under the National Credit Act a lender must make reasonable inquiries, verify your finances and assess that the loan isn't unsuitable for you, which includes whether you could repay it without substantial hardship over its whole term.
How lenders assess a loan that runs past retirement
ASIC's guide to responsible lending, RG 209, says that if you are approaching retirement and will still be repaying the loan after your expected retirement age, the lender needs to work out whether retirement is likely to change your income, and how much income you expect to have. It also sets out a presumption from the law: if you could only meet the repayments by selling your home, that is presumed to involve substantial hardship, unless the lender can show otherwise.
So expect a lender to ask:
- When you plan to stop work, and what your income will be after that (super, an account-based pension, the Age Pension or investments)
- What else you could use to repay the loan, such as savings or other assets
- Whether you plan to sell or downsize, and how much equity you expect to have at that point
- Your living expenses and other debts, tested at the loan rate plus a buffer (APRA expects banks to use at least 3 percentage points)
Can you get a 25- or 30-year loan in your 50s or 60s?
It can be possible, because age doesn't decide it: your plan for repaying does. ASIC's RG 209 gives two worked examples. Fiona, 55, applies for a 25-year principal and interest loan and plans to retire at 65, when her income won't cover the repayments. At first that looks unsuitable, but she plans to sell and downsize once she can no longer comfortably afford the repayments; ASIC says that if her likely equity at that point would readily repay the loan, it is reasonable to assess the loan as 'not unsuitable'.
In the second, Mark, 65, applies for a loan while planning to retire within a year. ASIC says it might seem prudent to refuse him, but inquiries showed his superannuation would cover both his living costs and the repayments. Both examples turn on evidence of how the loan will be repaid, which is what to prepare before you apply.
How to strengthen an application after 50
Lenders set their own credit policies, but these steps address what RG 209 asks them to consider.
- Document your retirement income: super balance and projected pension, plus any other investments
- Borrow less, or choose a term that ends at or soon after the age you plan to retire
- If you plan to downsize, show the property's likely value and the equity you'd keep
- Keep other debts low, and check your repayments at a rate 3 percentage points higher with our stress test calculator
- A larger deposit lowers your LVR, which leaves more equity if you later need to sell
Options if a standard home loan doesn't fit
If you can't, or don't want to, borrow on a standard home loan, these are the main alternatives. Each has rules set by the government body or regulator that runs it.
| Option | How it works | Watch for |
|---|---|---|
| Downsize and use the downsizer contribution | If you're 55 or older and sell a home you (or your spouse) owned for 10 years or more, you can each put up to $300,000 of the proceeds into super within 90 days of receiving them, outside the contribution caps | The total can't exceed the sale proceeds; check the ATO's conditions before you sell |
| Reverse mortgage | Borrow against your home's equity with no required repayments; interest is added to the loan and compounds | Moneysmart says the rate is likely to be higher than a standard home loan, and the debt grows over time. Reverse mortgages taken out from 18 September 2012 have negative equity protection |
| Home Equity Access Scheme | A voluntary, non-taxable government loan for people of Age Pension age or older, secured against Australian real estate, paid as a fortnightly amount and/or lump sums | Services Australia's current rate is 3.95% a year, compounding fortnightly until you repay; a no negative equity guarantee applies |
What to watch for
- A loan you could only repay by selling your home. The law presumes that involves substantial hardship, so expect the lender to test your plan.
- An interest-only period that ends after you retire, when repayments rise.
- Refinancing into a fresh 30-year term late in your working life without a plan for the years after you stop work.
- Reverse mortgage interest compounds, so the amount you owe grows each year.
- Being a guarantor on a family member's loan in retirement: your home is at risk if they can't pay.
Common questions
Can a 70 year old get a 20 year mortgage?
It's possible, if the lender is satisfied you can repay without substantial hardship, for example from super, other assets or a planned sale that would leave enough equity. The Age Discrimination Act doesn't let a lender refuse a loan because of age alone unless the decision relies on reasonable actuarial or statistical data.
Can I get a 30 year mortgage at age 55 in Australia?
It can be done if you can show how you'll repay after you retire. ASIC's RG 209 gives the example of a 55-year-old taking a 25-year loan who plans to retire at 65 and then downsize; ASIC says that can be 'not unsuitable' if her equity at the planned sale would readily repay the loan.
Is there a maximum age for a home loan in Australia?
No law sets one. The Age Discrimination Act 2004 makes it unlawful to refuse a loan because of age unless the decision relies on reasonable actuarial or statistical data. Lenders instead assess whether you can repay without substantial hardship, including after retirement.
What happens if my loan runs past my retirement age?
The lender has to consider how retirement will change your income and whether you could still repay. ASIC's RG 209 says lenders need information about the income you expect after your expected retirement age if you'll still be making repayments then.
What is the downsizer contribution?
If you're 55 or older and sell a home you or your spouse owned for at least 10 years, you can each contribute up to $300,000 of the proceeds to super, within 90 days of receiving them. It doesn't count towards the contribution caps (ATO).
What is the Home Equity Access Scheme?
A voluntary, non-taxable loan from the Australian Government for people of Age Pension age or older, secured against real estate they own. Services Australia lists a current interest rate of 3.95% a year, compounding fortnightly, and a no negative equity guarantee applies.
General information
This page explains the law and ASIC's guidance as published on the dates shown. It isn't legal or financial advice. For your situation, talk to a lender, a licensed mortgage broker or a financial counsellor.
