76-year-old gets 30-year home loan
AUSTRALIANS in their 70s and 80s are being approved for owner-occupier home loans that will see them paying off debts well past the age of 100.
Despite massive clampdowns by financial regulators on banks' lending requirements, mortgage industry sources have revealed to News Corp Australia that applicants as old as 83 have been approved for loans in 2017.
One source even revealed that a 76-year-old borrower was given a 30-year loan worth $940,000.
The mortgage and banking industry has continued to be hit by tougher lending measures in recent years, after regulators were forced to clamp down on areas that were experiencing exponential growth including interest-only and investment lending.
One banking source said internally banks will view customers over the age of 50 differently - if their loan length means they will be paying the mortgage off above the age of 70 and "they need to have an exit strategy".
But homeloanexperts.com.au's managing director Otto Dargan said lenders don't discriminate by age and view each home loan application individually.
"Just because someone is over 65 doesn't mean that it's inappropriate to give them a mortgage,'' he said.
"Lenders investigate their specific circumstances and identify how they are going to repay the loan without getting into hardship.
"Denying someone based solely on their age is a form of discrimination but lenders can deny a loan if it is unsuitable for the borrower."
He also said some older customers are high net-worth investors or own businesses that they don't need to work in or have an investment property they plan to sell to be able to repay the mortgage quickly.
For many borrowers in 2017 having fatter deposits and opting to pay principal and interest is almost essential to ensure they get approved on their applications and get a competitive interest rate.
A spokeswoman for the Australian Bankers' Association said for anyone getting approved for mortgages later in life there are strict measures in place to ensure they can repay the debt.
"When making lending decisions, banks take into account many factors including the customer's financial situation, employment status, income and expenses,'' she said.
"No two customers are the same so each case will be assessed differently in line with banks' responsible lending obligations."