Apr 16, 2018 11:27:06 AM

How old is too old when it comes to a mortgage?

Topics: Retirement, Mortgages, NZ Finance, Home Loan, reverse mortgage, Mortgage Debt 2

Older home buyers entering the market for the first time appear to be growing in numbers in Australia and New Zealand, as a combination of rising rents and low interest rates makes buying property a more attractive proposition. But, how big a factor is age when it comes to lenders determining your lending ability? Read on to find out.


Buying a home later in life

Young first home buyers are not the only ones struggling to get a foot onto the property ladder. More and more older first home buyers in their 30s to early 50s are joining the race too. And, while there’s no official maximum age limit when it comes to mortgage lending, the fact is, securing a home loan approval is that much more challenging the older you get. 

Although lenders cannot discriminate based on your age, they are still required to ensure you meet the usual lending criteria no matter your age. Having a steady income to meet your repayments on time is obviously vital, which could be a concern for lenders if you’re considering retiring in a few years’ time.

Lenders also have a responsibility to ensure that anyone they lend to can afford to repay their loan without undue financial hardship, and when you consider that a typical loan term is 30 years, securing a mortgage later in life could mean you enter retirement with mortgage debt. 

Getting mortgage approval

So, how do you buy a home later in life? And what can you do to improve your chances of securing a mortgage as an older first-home buyer? Lending experts agree that focusing on these things will help improve your chances:

  • An exit strategy. A clearly defined exit strategy outlines to the lender how you will cover your debt if you retire before the end of your loan term. For example, if you have a superannuation fund, a sizeable savings in the bank, or other properties that could be sold to pay off your loan. Lenders need to be assured that you can meet your repayments for the life of your loan.
  • Repay your loan before you retire. All lenders have different policies when it comes to lending to older home buyers, and some lenders may offer you a shorter loan term to ensure your loan is repaid in full before you retire.
  • Shop around and work with a lender that is experienced in dealing with older borrowers. As always, it pays to do your homework and research which lenders are more open to lending to mature home buyers. A Mortgage Express adviser can assist you here with advice on lending options.
  • To improve your borrowing power, pay down any existing debt and save a bigger deposit to increase your chances of home loan approval.

It may be not too late to step onto the property ladder. Talk to a Mortgage Express adviser about how to improve your chances of home loan success as an older first home buyer. 





While all care has been taken in the preparation of this publication, no warranty is given as to the accuracy of the information and no responsibility is taken by Mortgage Express Limited for any errors or omissions. This publication does not constitute personalised financial advice. It may not be relevant to individual circumstances. Nothing in this publication is, or should be taken as, an offer, invitation, or recommendation to buy, sell, or retain any investment in or make any deposit with any person. You should seek professional advice before taking any action in relation to the matters dealt within this publication.

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