Home loans for pensioners and over-55s
A pensioner or retiree can get a home loan: there is no legal age limit, and most lenders count the Age Pension as income, with some grossing it up by 20% to 30% because it is tax-free. What changes is the assessment: most lenders want an exit strategy from around age 50 for a loan that outlasts your working life, and many cap eligibility around 80. It works best when the pension is combined with super drawdowns, rental income or a co-borrower; if repayments are out of reach, the Home Equity Access Scheme and reverse mortgages need none.
- No legal age limit (Lendology); the Age Pension and Disability Support Pension count as income, JobSeeker and Austudy do not (Canstar)
- Some lenders gross the pension up by 20% to 30% because it is tax-free; super drawdowns are assessed for whether the balance can sustain them for the loan’s life (Lendology)
- Exit strategy: lenders want an agreed plan for repaying a 25 to 30 year loan that outlasts your working life (Canstar); most ask from around 50 and many cap eligibility around 80 (InfoChoice)
- No dedicated pensioner product; the same loans, at the lenders whose age and income policies fit (Canstar)
- If repayments are not possible: the Home Equity Access Scheme at 3.95%, a reverse mortgage from 55, or downsizing with a $300,000 super contribution
WARNING: This comparison rate is true only for the example given and may not include all fees and charges. Different terms, fees, or other loan amounts might result in a different comparison rate. Comparison rates are calculated on a secured loan of $150,000 over 25 years for home loans, a loan of $30,000 over 5 years for car and personal loans, and $50,000 over 5 years for equipment finance, unless the lender states another basis.
Can a pensioner get a home loan?
Yes. Lendology puts it plainly: there is no law in Australia that prevents someone over 60, 70 or even 80 from getting a home loan; what changes is how lenders assess the application, because they are looking at retirement income rather than a salary. Canstar publishes the regulatory frame: lenders are bound by responsible lending rules to establish that you can repay, and pensioners may need to jump through a few more hoops because of the nature of their income streams. Two hoops in particular: which income counts, and what the exit strategy is.
Which income do lenders count?
| Income type | How lenders treat it, as published | Source |
|---|---|---|
| Age Pension | Accepted as ongoing income by most lenders; some gross it up by 20% to 30% because it is tax-free | Canstar, Lendology |
| Disability Support Pension | May be acceptable, as an ongoing payment that does not stop if circumstances change | Canstar |
| JobSeeker, Austudy | Not accepted | Canstar |
| Super drawdowns (account-based pension) | Accepted; the lender assesses whether the balance is sufficient to sustain the payments for the life of the loan | Lendology |
| Investment and rental income | Accepted, usually shaded | Lagos Financial (downsizer guide) |
| Home Equity Access Scheme or reverse mortgage drawings | Can count towards income requirements on a purchase at some lenders | InfoChoice |
| Part-time or casual wages in retirement | Accepted with the usual tenure rules; see the parental leave and casual income guide | Home Loan Experts |
Canstar adds a practical point: pension increases for living costs happen only twice a year, in March and September, and do not necessarily track a variable rate rise, so a pensioner on a variable loan carries more rate risk than a wage earner. A fixed split answers that; the split loan guide covers it.
The exit strategy rule
Canstar publishes it: because a typical home loan is repaid over 25 to 30 years, many lenders want to establish an exit strategy for older borrowers, an agreed plan for how you intend to pay off the loan should it extend beyond your working life. InfoChoice publishes where the line falls: most lenders want to see it from around age 50, and many have a hard cap on eligible customers around 80. Strategies lenders accept are the ones that produce a lump sum on a date: downsizing and repaying from the sale, a super lump sum at retirement, the sale of an investment property or shares, or simply a shorter term that ends at retirement with repayments to match. The strategy has to add up on the lender's numbers, and it has to be one you would actually follow. A broker knows which lender accepts which, and which apply the age cap strictly.
How much can a pensioner borrow?
What the counted income services under the same buffered assessment as any borrower, which InfoChoice notes applies to older borrowers too. A single Age Pension, even grossed up by 30%, services a small loan; the applications that get approved combine it with super drawdowns, rental income or a co-borrower, or come with a large deposit from a sale so the loan is small. The borrowing power calculator gives an estimate from the combined figure, and the shorter the term the exit strategy allows, the higher the repayment for the same amount.
When a standard loan will not work
Three products exist for retirees who cannot service repayments. The government's Home Equity Access Scheme, through Services Australia, lends to anyone of Age Pension age at 3.95% compounding fortnightly, paid as a fortnightly amount or a lump sum advance, with no repayments until the home is sold. A commercial reverse mortgage does the same from age 55 at higher rates, with the same no negative equity guarantee; the reverse mortgage guide compares the lenders and the calculator shows the compounding. Downsizing releases the equity outright, and the downsizing guide covers the loan on the next home, the $300,000 downsizer super contribution and the pension effects. InfoChoice's advice applies to all three: speak to a financial adviser about pension eligibility before you draw. Some licensed brokers arrange reverse mortgages as well as standard loans; get matched with one who works this kind of lending and they contact you.
Borrowing after 55
The loans, the alternatives and the calculators.
Pensioner home loan FAQs
Can you get a home loan on Centrelink benefits?
Can I get a 30 year mortgage at age 55 in Australia?
What is an exit strategy?
How much can a pensioner borrow?
Is there a specific pensioner home loan?
What if I cannot service a loan at all?
Do pensioners pay stamp duty?
A home loan that fits retirement income
Tell us your income sources and your plan for the loan, and we refer you to one licensed broker partner who knows which lenders count the pension, how they treat super, and what exit strategy each accepts. Free for borrowers, no obligation.