Tips to improve the odds

Here are four ways to improve your chances of getting a mortgage if you are over 50. 1 Have a defined exit strategy, which is effectively a back-up mortgage repayment plan. This can vary depending on factors including how many assets you own, your income and your expected superannuation position at your planned retirement age.

According to mortgage broker Home Loan Experts (homeloanexperts.com.au), common strategies include:

• reducing the loan term;

• downsizing to a smaller home when you reach retirement (not accepted by all lenders);

• selling assets, such as an investment property or shares;

• Lump sum repayments from superannuation;

• ongoing income from superannuation;

• ongoing income from other sources, such as rental income, annuities, and dividends. 2

Repay the loan before retirement. Once you’re in your 40s, a typical 30-year loan would put you in your 70s before it’s fully paid. Many lenders are reluctant to write such a loan unless you can demonstrate you have the means to keep making your mortgage payments in retirement. 3

Clean up your finances before applying for a mortgage. According to home loan lender Yard (yard.com.au), this can include:

• minimising how much debt you have, particularly of unsecured debt like credit cards and personal loans;

• making sure your financial affairs are in order, with no outstanding payments or tax debt;

• finding out your credit score or rating, which will give you a good idea how lenders will view you from a risk perspective;

• saving for the largest deposit you can, to limit the size of your loan;

• minimising your daily/weekly outgoings or expenses associated with your lifestyle. 4 You should apply with a lender that understands and accepts mature-age borrowers. Using a specialist mortgage broker to help you with this is certainly worth considering.