Australian banks set no fixed maximum age for home loans, and the law stops them from rejecting an application on age alone. In practice, most lenders become reluctant to write a standard 25 or 30-year loan once the term would run well past the borrower’s likely retirement, unless the borrower can show how the debt will be repaid.
For a broker, that means age itself is rarely the obstacle; an undocumented repayment plan after work stops is. This article explains the rules that apply, what lenders ask older borrowers for and how to position an application so it clears their checks.
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What the law says about age and lending
The Age Discrimination Act 2004 makes it unlawful to refuse someone a service, including credit, because of their age. The Act contains a specific exemption for credit: a lender may treat applicants differently by age where the decision rests on actuarial or statistical data that it is reasonable to rely on. Responsible lending rules under the National Consumer Credit Protection Act 2009 work in the same direction. A loan is unsuitable if the borrower could only meet repayments after their likely retirement by selling their home or suffering substantial hardship, unless their stated plans make the outcome realistic.
The practical result: a lender cannot have a blanket rule refusing all applicants over a set birthday, but it can weigh the borrower’s age when judging whether the loan can be repaid. That is why lender policies differ so much. Some ask about retirement plans whenever the loan term crosses age 65, while others apply written exit-strategy requirements from the mid-50s. Policies change, so check each lender’s current criteria rather than relying on a remembered threshold.
How lenders assess older borrowers
Expect shorter loan terms for applicants nearing retirement. A 20-year term instead of 30 keeps repayments inside the borrower’s working life, though it raises each repayment because more principal is retired each month.
When assessing mortgage applications from older borrowers, lenders look at the same fundamentals as any application, then add retirement-specific questions. The three that decide most cases are income beyond the loan’s early years, the superannuation balance available as a fallback, and other assets that could be sold to clear the debt. Health is not a formal criterion, but the expected retirement timeline shapes the loan terms a lender will offer, and some lenders ask for supporting documents such as superannuation statements or Centrelink income summaries.
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Depending on the lender, an application may also need extra conditions:
- a co-signer or guarantor where the borrower’s post-retirement income looks thin
- life insurance or Mortgage Insurance where the lender wants the debt covered against unforeseen events
- a larger deposit or additional security where the exit plan depends on selling an asset
Positioning an older client for approval
Start the conversation with the exit strategy, not the property. Work out when the client expects to stop working or reduce hours, then test whether the proposed loan is repaid or manageable at that point. The plan the client writes down becomes the lender’s evidence: proceeds from downsizing, a sale of another asset, superannuation access or retirement income that comfortably covers the repayments.
Before lodging, work through the basics that matter at any age. Reduce debt that competes with the mortgage for serviceability, and gather proof of every income source the application relies on, including pension and super pension streams. Preparing early makes the application process smoother once a property is in play. A client with time before applying can strengthen the file further: a documented savings record and healthy Credit Scores make the repayment case easier.
A common mistake is lodging with the same lender the client has always used. Age policies vary widely between banks, and the lender that declined a 62-year-old last year may have a competitor down the road with a written policy for exactly that scenario. Compare policies on exit strategies and maximum term at age, not just rates.
When a standard loan is not the answer
Some older clients want to unlock home equity rather than take on new repayment debt. A reverse mortgage lets a homeowner borrow against equity with repayment deferred until the home is sold or the borrower moves out permanently. Interest compounds on the balance, and the debt reduces what the estate inherits, so the client should weigh it against downsizing or equity release alternatives with professional advice before committing.
For your next older client, open with two questions: when do you plan to stop working, and how would the loan be repaid if that date arrives early? The answers tell you which lenders can say yes and what evidence to gather before you lodge.
