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Anthony Stevenson

Anthony Stevenson

Updated 15/03/2024

Approaching your sixties often means preparing for retirement and enjoying more time with family and friends.

It’s also at this stage that you might be thinking about relocating to a new city, or downsizing your current home to something more appropriate. You might even be building up a portfolio of investment properties to live off in your retirement.

Whatever your plans are as an older Australian, you may still need to take out a home loan. If you have questions about getting a mortgage as a senior, this guide will help answer them.

Once you’re armed with all the relevant information, you can start comparing a range of home loans online.

Key Points

  • There’s no age that’s considered ‘too old’ for a home loan, but you may face tougher lending criteria.

  • Having a defined exit strategy can help convince lenders that you’re a good candidate for a home loan.

  • Be aware of the different risks of borrowing in your senior years, such as getting locked into a high interest rate.

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Can a pensioner get a home loan?

If you receive the age pension then you may be wondering whether you can take out a home loan. The good news is that yes, there are a number of lenders that will allow you to borrow even if you’re retired and on the pension.

In fact, you may even be able to qualify if you receive a disability or carer’s pension.

That being said, it may be more difficult to get approved for a home loan compared to other types of buyers.

Because you’re likely on a lower, and/or more limited, income and also a senior with a shorter life expectancy than a younger borrower who’s working full-time, you may be faced with a higher interest rate and not be able to borrow as much.

Get key information on reverse mortgages in our fact sheet here

Does a retired person have the same qualification process for a mortgage as an employed person?

Because a retired person taking out a home loan is a different lending risk to a younger borrower, you may face tougher lending criteria during the home loan application and assessment process.

This isn’t the same with all Australian lenders, but it’s important to know that it may happen to you, depending on your circumstances – such as your age, income, amount of savings and whether or not you’re on the age pension.

One of the biggest factors in the qualification process will be proving to the lender that you can pay off your home loan by a certain age (e.g. by the time you turn 75 years old).

So while you may not be able to take out a more comfortable 30-year loan as a retiree, if you can prove that the mortgage will be entirely paid off within their restrictions then the qualification process may be a little smoother.

What is the easiest mortgage to qualify for?

This depends on how much you need to borrow, the length of the loan you need, and your financial situation – such as whether there's any equity in your current home, your level of income, your current savings and your exit strategy.

Thankfully, in Australia there are a number of protections to stop lenders from discriminating against borrowers because of their age, namely the Age Discrimination Act 2004 and the National Consumer Credit Protection Act 2009.

While qualifying for a mortgage may not always be ‘easy’ as a senior, you can take the stress out of finding the right lender by comparing home loans online. In just a few short minutes you can enter all the relevant details and see which lenders match your specific needs.

Can I borrow against the equity in my current home?

You can - in fact, this is one of the easiest home loans for an older borrower to access and can offer you a wider range of lenders and loan terms. A Compare Club broker can walk you through all the ins and outs of applying for a home equity loan in your fifties, sixties, and even in your seventies.

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Is Centrelink an option for getting a loan for seniors?

Centrelink isn’t a lender, and you can’t apply for a home loan through the Services Australia department.

However, if you’re receiving the age pension through Centrelink then you may be able to supplement your retirement income with a voluntary non-taxable fortnightly loan. The Pension Loans Scheme is available for aged pensioners with equity in Australian property.

In order to take out a home loan as a pensioner or retiree, however, you will need to find a suitable mortgage lender.

Do mortgage lenders look at retirement accounts?

When applying for a home loan, lenders look at ‘genuine savings’. In most circumstances, superannuation doesn’t fall into this category and you will need to show other types of savings or investments.

Also, if you have taken money out of your super before retiring, then this may impact your ability to get a home loan.

However, superannuation can be used positively when getting a home loan. The First Home Super Saver (FHSS) scheme allows you to put up to $30,000 in eligible voluntary contributions into a home deposit. This figure doubles ($60,000) for couples.

Be aware: this is only for first home buyers and may not be appropriate for many seniors

What are the risks of mortgages for seniors?

One of the biggest risks is that because you may no longer work full-time or regular hours, then you may not be able to make your repayments over the life of your loan.

This can be amplified if you become ill or injured as you get older, and you're unable to earn a living. If the age pension or your super isn’t enough to make your mortgage repayments, then you could end up losing your home.

There are also risks around getting locked into a high-interest loan for too many years. Make sure you speak to a financial professional before jumping into a mortgage you may not be able to afford.

Is there an age that is considered too old for a home loan?

Technically there is no age that’s considered ‘too old’ for a home loan, however you may find some lenders will decline your application if you’re a senior and unable to prove ongoing post-retirement income.

There’s one thing you can do as a senior to help get your home loan application over the line: write out a complete exit strategy. This includes things like assets you can sell to make repayments (e.g. shares, investment properties), as well as detailed paperwork on your superannuation amount, and any inheritances you’ve received.

Your exit strategy should also include any future plans like continued work (i.e. ability to earn an income), making the length of your loan shorter, downsizing to a smaller/cheaper home, or getting a reverse mortgage to access equity in your home.

Where can I get the best home loan for seniors?

Everybody’s financial situation is different but there are several financial institutions that are happy to lend to seniors, and you may also wish to explore options from specialist and non-traditional lenders.

To get started, you can do your own research, hire the services of a mortgage broker, or make life easy by doing everything online.

Compare Club can help you find a home loans for seniors that suits your needs and your personal circumstances. The whole process is quick and hassle-free, and you can get started today.

If you’re keen to start the home loan process in your senior years, start comparing lenders right now with Compare Club.

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This guide is opinion only and should not be taken as financial advice. Check with a financial professional before making any decisions. Home loans for pensioners. Govt. legislation Pension loans scheme Superannuation and qualifying for your home loan First home super saver scheme Reverse mortgages and equity loans

Anthony Stevenson, is the head of home loans at Compare Club. With over a decade of experience under his belt, Anthony is dedicated to helping individuals make informed decisions when choosing a home loan. Whether it's finding the best deals on your home loan or refinancing, Anthony has a wealth of knowledge in the space.

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Meet our home loans expert, Anthony Stevenson

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