#MortgageDilemma 💸 #RetirementPlanning 🏡
Do banks consider your age when deciding on a mortgage term? Will reaching 40 years old put you at a disadvantage when trying to secure a mortgage over 25 years?
Here are some thoughts and possible solutions:
– Some banks do have age limits for mortgage terms, as they want to ensure you can repay the loan before retirement age.
– However, there are lenders who are more flexible and may be willing to consider your overall financial situation rather than just your age.
– It’s essential to shop around and find a lender that fits your unique circumstances and goals.
– Consider options like increasing your income, reducing expenses, or looking into government schemes to help you save for a deposit faster.
– Always seek professional advice from a financial advisor to make informed decisions.
What do you think? Have you faced a similar dilemma? Share your thoughts and experiences below! 💭🏠
They will ask about your ‘exit strategy’, and consider it on a case by case basis.
https://www.canstar.co.nz/home-loans/am-i-too-old-for-a-home-loan-in-new-zealand/
Might do a 30 year mortgage, until your 70, not much more,
Mortgage broker here – it’s workable, banks will go above 65 by negotiation, 70 is much easier than above 70, but if you can articulate a clear exit strategy (how you’ll pay the loan off once you stop working), then it’s doable. Exit strategies that work depend on the bank, but can be a whole range of things including downsizing. Do you want some help making a plan for getting in a position to buy? Happy to make you a spreadsheet.
Disclaimer not financial advice
Mortgage term upto 70 or alternatively go beyond if you can demonstrate the ability to downsize.
As a 40 year old, I’d be showing the bank my strategy to increase payments and reduce the time on mortgage over many years.
I might sign up with a 30 year mortgage, but the intention will be to pay it down in <20 as wage inflation takes hold over two decades but my overall payment structure with the bank remains fairly static (interest rate changes not withstanding.. that’s another piece of proof that I need to ensure)
I was 44 when I bought my current home with a 30 year mortgage (won’t take that long to pay though)
My partner was 45 when we bought and got offered 40 year. Then at 54 we moved house and they gave us another 30 year one .
I can’t believe they did this , so he’ll be 84 when we pay off the mortgage?!!
It’s definitely do-able, even beyond that age. Think of a 50 year old who works in an office and plans to work to 70. That’s only 20 years, but the bank might give them a 25 year mortgage, or even 30, even if they plan to retire at 70.
Over the first 20 years, the house will have very likely appreciated quite a lot, even just due to general inflation (each dollar being worth less). Once the owners are 70, they can either downsize, or whoever is the beneficiary of the inheritance can take over the mortgage payments for the final years. Either way, if it doesn’t work out, the bank can sell the house and definitely get the remaining mortgage amount back, as the house will be worth so much more than the remaining debt. Even if the house didn’t go up in price, this would still be the case. It’s not really much of an increased risk from the bank’s perspective.
My brother was 42 and wife 35 when they bought his first home 3 years ago. 30yr mortgage
They won’t place too much importance on it, but they will ask about your intentions/plan.
An answer as simple as ‘I won’t retire at 65’ is usually sufficient.
At the end of the day, they hold security over the property, worst case scenario you default, have no other way to meet your repayments, and they sell the house to recoup their exposure.
Obviously, they’d prefer not to, but they are protected, so realistically they don’t care – but they need to make sure you’ve considered it and have a plan in place if your mortgage term goes past retirement age.
So we moved house and re-mortgaged at the same time when almost 50. The bank asked us how we planned on paying it back etc and our plans overall for retirement. I mentioned we were only going to have a 10-12 yr mortgage, and the house we got will be subdevidable at a later date, but also we eventually plan on selling and moving to a cheaper area for retirement and have no mortgage. They were satisfied
Superannuation can be used to make payments, it depends on your weekly costs. You might be able to sell your car or one car if you are a couple and reduce some of your cost of living.
They didn’t ask us anything last year and we were both early to mid 40s. 30 year term. BUT we were borrowing well within our means. We should actually be paid off in ~10 years.
Bold of you to assume retirement age will be 65 in the future 😭 By the time we’re all 65, we’ll be working until we’re 80+.
I’ve worked some 70 year olds who lost their life savings during the 2008 GFC. One was granted a mortgage 8 years ago when he was early sixties, so the banks are still willing from what I’ve seen.
No, nothing stops you then paying faster and making lump sum payments to be free before 65
We got a 30yr mortgage when my husband was 60, and we’re self employed, so it’s possible.
When we bought I was 35 and Mrs B was 27. I don’t remember age being brought up on our then 30 year term but I would have been 65 if I had waited the full term.
Managed to pay it off after 11 years anyway.
Yes we were lucky to buy when we did.
My relative was approved for a mortgage of around 500k at 62 years old and on ACC. His partner works full time in an admin role. Buggered if I know how they got approved.
I got my first house last year at 60 ,bank gave me a 17 year mortgage