Published : 29 July 2016
We hear a lot about young people struggling to buy their first home, but there's another demographic group that is becoming just as relevant in the property market, and that's Australian seniors.
It's a proven fact that we are living longer these days so it makes sense that older Australians will also be looking for home loans later in life.
According to the Australia Bureau of Statistics, the proportion of Australians aged 65 and over increased from 11.8% to 14.7% of the population from 1994 to 2014. Yet most believe it impossible to obtain finance to buy a home.
However, it's important to remember that it's against the law to discriminate on the basis of age. The fact that you are asked for your date of birth when you talk to lenders, is more to do with identification, rather than loan eligibility.
The lender's biggest concern is the applicant's ability to repay the loan.
Once we are aged over 50, lenders look at three main issues - income earning potential, loan term and assets.
The first and second points are self-explanatory - lenders need to know you can meet your repayments on a regular basis and, clearly, it may not be feasible to grant the usual 30-year loan term.
Regarding the third point, lenders are more willing to give loans to older Australians who own assets, such as other properties, businesses, shares, or Super. In short, this guarantees the lender will be repaid, even if you stop earning.
Interestingly, the UK appears to be ahead of Australia in accommodating older mortgage applicants. Britain's biggest building society has recently increased its maximum age for loan applications to 85, to help boost the housing market.
Nationwide Building Society previously set its limit at 75 years of age, but increased it to 85 as from this month.
If you are an older Australian, keen to arrange a home loan, have a look online. While all lenders, in theory, should be willing to discuss this with you, there are also specialist lenders working with Over 50s to secure mortgages.