- Most lenders will want to see an exit strategy i.e. how you are going to pay for the loan after you turn 50. Many lenders also have a hard cap of eligible customers around 80 years of age.
- The age pension might be assessed as income, but will likely not be enough.
- If you already own a home outright and you're looking to buy another, various home equity schemes such as the Home Equity Access Scheme, home equity loans and reverse mortgages could count towards income requirements.
- There are also relaxed pension criteria and stamp duty exemptions for those looking to downsize their home.
- It's highly recommended you speak to a financial adviser or tax professional to find out how you can fund a home purchase in your later years, especially without hurting pension eligibility.
During the typical home‑buying years, often your late 20s or early 30s, you apply for a loan with a deposit, steady income and a solid savings history, and you may be well on your way. With most mortgage terms spanning 25 to 30 years, this gives younger borrowers a realistic chance of paying off their loan before retirement.
At the same time, lenders assess your ability to afford repayments at a higher “buffered” interest rate, which can affect how much you’re able to borrow.
But the picture changes as you approach retirement.
Lenders place greater emphasis on how a loan will be repaid once regular employment income stops. This can make securing a home loan more complex, even for borrowers who have built up significant wealth.
Many retirees, after all, are “asset rich but cash poor”, with much of their wealth tied up in property rather than income‑producing assets.
As a result, you may need to clearly demonstrate how the loan will be repaid, explore alternative strategies, or make use of available schemes.
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| Lender | Home Loan | Interest Rate | Comparison Rate* | Monthly Repayment | Repayment type | Rate Type | Offset | Redraw | Ongoing Fees | Upfront Fees | Max LVR | Lump Sum Repayment | Extra Repayments | Split Loan Option | Tags | Features | Link | Compare | Promoted Product | Disclosure |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
6.04% p.a. | 6.08% p.a. | $3,011 | Principal & Interest | Variable | $0 | $530 | 90% |
| Promoted | Disclosure | ||||||||||
5.89% p.a. | 5.80% p.a. | $2,962 | Principal & Interest | Variable | $0 | $0 | 80% |
| Promoted | Disclosure | ||||||||||
6.14% p.a. | 6.18% p.a. | $3,043 | Principal & Interest | Variable | $0 | $530 | 90% |
| Promoted | Disclosure |
What is an exit strategy?
An exit strategy is a documented plan outlining how you will repay your home loan, particularly if you’re taking it out later in life, typically from age 50 onwards.
Lenders are under increasing regulatory pressure to ensure borrowers can sustainably repay loans into retirement, making a clear exit strategy more important than ever. Given most home loans run for 25 to 30 years, lenders need confidence that the debt can be repaid even after regular employment income has ceased.
While life expectancy in Australia is around 83 years, lenders don’t assess to this directly. Instead, they look at whether a loan can be cleared by a certain age or supported by a realistic repayment plan. As a result, borrowing later in life may mean working within shorter loan terms or stricter approval criteria.
An exit strategy typically involves showing how you’ll draw on superannuation, generate income from investments, or sell assets such as an investment property or even your home. Some borrowers may also rely on downsizing or accessing home equity later in life.
Lenders will typically assess the property’s value, outstanding debt, and expected net proceeds to ensure it’s sufficient to clear the loan.
Depending on your circumstances, you may need to opt for a shorter loan term, for example, 10 to 15 years, which can increase monthly repayments but reduce overall interest costs.
Home loans for age pensioners - is it possible?
It’s going to be a tough ask to service a mortgage solely on the age pension, even if you and your partner are receiving the top rate.
Your bank will want to see other income streams, but these could affect your eligibility for the pension. and any assets, including superannuation are subject to deeming rates. This can create a catch‑22, as additional income may reduce pension entitlements through means testing
Government-run schemes
Pension Loans Scheme & Home Equity Access Scheme
The pension loans scheme was renamed the home equity access scheme in 2022. And for good reason - the new name is more indicative of what it entails. Essentially, the government will loan you a certain amount backed by the equity in your current home.
The scheme is available to senior Australians who meet age pension age and residency requirements and own real estate in Australia. It allows eligible participants up to 150% of the maximum fortnightly rate of the age pension. Self-funded retirees can access the whole 150% as a loan, while those on the maximum age pension rate can receive 50%, and part pensioners can receive a rate in between. Lump sum advances are capped at 50%.
Unlike other types of loans there are no regular repayments. Instead, funds are recouped through the sale of the home.
Downsizing scheme
The Social Services and Other Legislation Amendment (Incentivising Pensioners to Downsize) Act 2022, or downsizing scheme for short, extends the pension assets test for those looking to downsize their home.
Under the scheme, the existing 12-month asset test exemption for principal home sale proceeds a person intends to use for a new home will be extended to up to 24 months.
This essentially allows those on the age pension to receive their full allowance to sell their old home, get their affairs in order, and move into the new home without sacrificing age pension payments.
Further, some state governments may have exemptions when you’re downsizing in your later years. For example, Victoria allows eligible pensioners to receive a one-off duty exemption or concession when they buy a new or established home, valued up to $750,000, to live in as their principal place of residence (PPOR).
Unlock equity in your existing home
Home equity loan
A home equity loan allows you to borrow against the equity in your current home, which is hopefully a lot if you’ve paid it off or lived in it a while.
The equity acts as security for the loan, and you’ll be charged the usual interest costs as well as pay back the principal across regular payments.
Reverse mortgage
If you already own your current home outright and want better cashflow, a reverse mortgage allows you to draw down on a portion of the value of your home without making regular repayments.
Instead, when you eventually sell that home you pay back what you’ve borrowed, plus interest. There is also a government-mandated ‘No Negative Equity Guarantee’ and you will never owe more than the home’s worth.
Heartland Reverse Mortgage allows people over 60 to access some of the equity in their home, helping them fund a more comfortable retirement. Importantly, with a reverse mortgage you continue to own and live in your home.
Highlights- Heartland deeply understands the particular needs of people over 60 and has a passion for changing the lives of Australians as they are moving to, or in, retirement.
- Flexible drawdown options such as a lump sum up front, regular ongoing advances (monthly, quarterly or annually), or a ‘cash reserve’ facility for future access to funds.
Australian Seniors Advantage Group (ASAG) Reverse Mortgage allows senior homeowners to borrow money against their home without monthly repayments and having to sell.
Highlights- Eliminate Regular Debt Payments
- Continue to Live in Your Home
- Improve Your Home & Lifestyle
- Government Regulated - No Negative Equity Guarantee
*Comparison rate is based on a loan of $150,000 over a term of 25 years. Please note the comparison rate only applies to the examples given. Different loan amounts and terms will result in different comparison rates. Costs such as redraw fees and costs savings, such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. Product information last updated 10th February, 2026.
First published in July 2023
