Borrowing Above Age 50: Can You Still Get a Home Loan?

For young people entering the mortgage market, the process is fairly straightforward. Fast forward to age 50 and above, and the home loan process can become a little more complex.

Obtaining a home loan over the age of 50 is still possible. The main consideration with this type of application is satisfying the lender that an unaffordable debt will not remain in retirement. Lenders must demonstrate reasonable steps to ensure the loan can be paid out without leaving a large debt in retirement.

An effective way to address this is having a realistic and achievable exit strategy in place, showing how the debt can be cleared before primary income stops. When reviewing an exit strategy, a lender may look for sufficient assets to cover all loans or ongoing income to maintain payments.

Lenders are not permitted to discriminate based on age, but they have a responsibility to avoid placing borrowers in unfavourable circumstances now or in the future. In the absence of an exit strategy, an alternative may be a shorter loan term, which increases repayments but ensures the loan is paid off before a standard retirement age.

Securing a home loan later in life requires preparation, but it is certainly possible. Factoring mortgage requirements into retirement planning can simplify the process when purchasing a property or reviewing an existing loan past age 50. Having a clear and realistic strategy in place helps ensure a smoother process.