ELDERLY Australians are getting approved for home loans which could leave them paying off their mortgage until they are 113.
Banks have admitted signing up customers in their 70s and 80s — one customer at 83 — for home loans despite some lenders toughening their age restrictions.
No age limit ... Australians in their 70s and 80s are getting approved for home loans in Australia but lenders say they have strict serviceability rules to make sure the borrower can repay the loan. Picture: Supplied
Data from financial comparison website RateCity shows the number of lenders with no maximum age restriction has fallen from 88 per cent last year to 76 per cent this year.
According to the site’s database lenders including the Bank of Sydney, Bank of Queensland, Firstmac and loans.com.au have introduced age caps on some of their loans in the past 12 months ranging between 65 and 75.
Previously they had no age restrictions.
Some of the reasons why people want a home loan loan later in life are because it can be cheaper than paying rent or for an investment.
But RateCity spokesman Peter Arnold said taking out a loan in your twilight years can be incredibly risky.
“You could die before you’ve paid off your mortgage especially if you are signing up at the age of 83,’’ he said.
The Australian Bankers’ Association’s chief executive officer Steven Munchenberg said responsibility lending restrictions apply before approving loans to customers to ensure they can meet repayments.
“When you go for a loan serviceability is a critical issue,’’ he said.
“Why there isn’t a hard and fast rule ...(about age) is because we have to make sure we aren’t discriminating against people.”
Firstmac managing director Kim Cannon said they changed the
age restrictions of applicants from no age limit to 67 across their
FirstMac and loans.com.au products to fall in line with the nation’s
retirement age.
“If a loan applicant is approaching the deemed retirement age of 67 we would ask them to demonstrate their ability to meet the repayments or clear the debt once their working income stops,’’ she said.
“Otherwise we would be likely to decline the loan.’’
Currently on the average $300,000 30-year loan the average standard variable rate is 5.04 per cent and the monthly repayments are $1618.
On the same mortgage with a three-year fixed rate three-year fixed rate is 4.57 per cent and the monthly repayments are $1533.
Elite Wealth Creators have been involved in the property and finance industry for over 20 years. Our Investment Property Strategists deliver investment grade properties to the investment market and mediate between the developer and the investor. We also assist first home buyers in purchasing their first home in QLD through our house and land packages – this includes receiving $20,000 cash back towards their mortgage by buying one of our full turn-key packages.
Our service will take you through the complete process of buying positive cash flow property, including:
• educating you on positive cash flow and the ability to pay your mortgage off years in advance
• saving you thousands of dollars in interest
• supporting you in the decision on which property to buy
• assisting in the organizing of your finances, if required
• preparing you for settlement of contracts
• liaising with other professional advisers on your behalf if required.
Our Strategists specialise in delivering quality positive cash flow property and also helping investors pay off their mortgage years in advance
http://www.
sales@elitewealthcreators.com
1800 GO ELITE
Banks have admitted signing up customers in their 70s and 80s — one customer at 83 — for home loans despite some lenders toughening their age restrictions.
No age limit ... Australians in their 70s and 80s are getting approved for home loans in Australia but lenders say they have strict serviceability rules to make sure the borrower can repay the loan. Picture: Supplied
Data from financial comparison website RateCity shows the number of lenders with no maximum age restriction has fallen from 88 per cent last year to 76 per cent this year.
According to the site’s database lenders including the Bank of Sydney, Bank of Queensland, Firstmac and loans.com.au have introduced age caps on some of their loans in the past 12 months ranging between 65 and 75.
Previously they had no age restrictions.
Some of the reasons why people want a home loan loan later in life are because it can be cheaper than paying rent or for an investment.
But RateCity spokesman Peter Arnold said taking out a loan in your twilight years can be incredibly risky.
“You could die before you’ve paid off your mortgage especially if you are signing up at the age of 83,’’ he said.
The Australian Bankers’ Association’s chief executive officer Steven Munchenberg said responsibility lending restrictions apply before approving loans to customers to ensure they can meet repayments.
“When you go for a loan serviceability is a critical issue,’’ he said.
“Why there isn’t a hard and fast rule ...(about age) is because we have to make sure we aren’t discriminating against people.”
“If a loan applicant is approaching the deemed retirement age of 67 we would ask them to demonstrate their ability to meet the repayments or clear the debt once their working income stops,’’ she said.
“Otherwise we would be likely to decline the loan.’’
Currently on the average $300,000 30-year loan the average standard variable rate is 5.04 per cent and the monthly repayments are $1618.
On the same mortgage with a three-year fixed rate three-year fixed rate is 4.57 per cent and the monthly repayments are $1533.
Elite Wealth Creators have been involved in the property and finance industry for over 20 years. Our Investment Property Strategists deliver investment grade properties to the investment market and mediate between the developer and the investor. We also assist first home buyers in purchasing their first home in QLD through our house and land packages – this includes receiving $20,000 cash back towards their mortgage by buying one of our full turn-key packages.
Our service will take you through the complete process of buying positive cash flow property, including:
• educating you on positive cash flow and the ability to pay your mortgage off years in advance
• saving you thousands of dollars in interest
• supporting you in the decision on which property to buy
• assisting in the organizing of your finances, if required
• preparing you for settlement of contracts
• liaising with other professional advisers on your behalf if required.
Our Strategists specialise in delivering quality positive cash flow property and also helping investors pay off their mortgage years in advance
http://www.
sales@elitewealthcreators.com
1800 GO ELITE
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