‘I am in my 60s, can I get a mortgage?’ This is a regular enquiry that Chan & Naylor brokers receive. In many instances, the answer is ‘Yes’.
However, for maturer-aged applicants, some lenders are more flexible than others.
Guiding the lenders’ assessment of a 60-year old’s loan-worthiness is some very firm guidance from the Australian Securities Investment Commission (ASIC). It states that lenders can approve a loan only if the client has an adequate Exit Strategy for the day when they no longer have wages to make the loan repayments.
A maturer aged applicant will get loan approval if:
- They can prove that they have adequate superannuation to payout the loan once they are no longer working
- The purchase property is an investment property such that they will be able to sell the property and pay out the loan once they are no longer working (and not have to leave their own home)
- They currently have adequate income now so that they can make the repayments over a shortened loan term (rather than the standard 30-years)
Of course, there are also some specific loans designed for solely for older applicants. The best example is a reverse mortgage, which allows borrowers to tap into the equity on their property so that they have adequate cash to live off in their later years.
The banks won’t throw their money around liberally with reverse mortgages though. All reverse mortgage applications will require legal and financial planning sign-off to ensure that the banks are lending responsibly to someone who is in their retirement.
Older Australians can get a loan if they approach the right lender. For further advice, please contact your Chan and Naylor broker.