Borrowing Above the Age of 50 – Can I Still Get a Home Loan?

For people who are young and just entering the market for a mortgage, the process is fairly straightforward. Now, fast forward into the 50th year of your life and you may have noticed the home loan process becomes a little more difficult. You may be asking “why”?

First let us start with that yes, obtaining a home loan above the age of 50 is still possible! The main setback with this type of application is the ability to satisfy the bank you won’t have a large and unaffordable debt to pay when you retire. The bank has to be able to demonstrate they have taken reasonable steps to ensure you can pay the loan out in retirement and are not left with a large debt.

The easiest way to overcome this issue is to have a realistic and achievable ‘exit strategy’ in place to show that you can easily clear the debt before your income comes to an end. A little closer look into the exit strategy, a bank may want to see that you have enough assets to cover all your loans, or income to continue to pay the loans.

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Banks are not allowed to discriminate people due to age, but they also have a responsibility to ensure they do not put the borrower in unfavourable circumstances – both now and in the future. A work around in absence of an exit strategy could be for a shorter loan term, which raises payments but ensures they will be paid before the standard retirement age of around 70.

It can be difficult for someone in their golden years to get a home loan, but it certainly is not impossible. If you or someone you know anticipates purchasing home, re reviewing their mortgage past the age 50, it may be wise to factor that into retirement planning to simplify the process later on in life. Ultimately, just be prepared, have a plan in place, ensure your strategy is realistic and everything should work out in your favour.

If you need help with your home loan application, we will help with planning your exit strategy so that the application is a breeze. We do this all day every day so we know what is acceptable to the bank and what isn’t.

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