By Graeme Salt
Many banks are realistic about lending to older Australians.
Over the past 20 years, the number of Australians aged 55 to 64 who own their homes outright has almost halved.
Meanwhile the portion of homeowners older than 65 with mortgage debt has gone from 4 per cent in 2002-03 to about 13 per cent.
As a result, some banks are now more pragmatic about older mortgage applicants than they used to be. They may ask questions such as:
- How long do you intend to work for
- What’s your likely Super balance going to be at retirement
- At retirement could you downsize into a cheaper property
And the trend towards retiring with a mortgage is likely to continue
According to Vanguard’s How Australia Retires 2025 report, 36 per cent of Millennials expect to have a mortgage when they retire, compared to 27 per cent of Gen X and 24 per cent of Baby Boomers.
In contrast, the report found that only 8 per cent of those who had already retired were still paying a mortgage this year.
With these trends, some reputable banks are fine with a home loan applicant who is likely to retire with some debt.
However, they are governed by Responsible Lending legislation which means that they may do more due diligence than for a younger applicant.
If you are older, but would like to explore finances for home ownership, message me and will give you some honest feedback.
Graeme Salt is an award-winning mortgage broker. For a no-obligations consultation on your home loan needs, please contact him on 02 9922 5055.
