Home Loans for Over 60's in Canberra: A Complete Guide

For many, navigating home loans for over 60's in Canberra can feel overwhelming. With tighter lending criteria and age limits, this group of borrower often struggle to find loan options that meet their needs in retirement. 

Traditional lenders may view reduced retirement income or shorter loan terms as higher risks, making the process even harder. This is where experienced mortgage brokers come in—helping seniors explore tailored loan options, craft viable exit strategies, and make informed choices.

In this guide, we’ll break down everything you need to know about home loans for over 60's, especially in Canberra.

What are Home Loans for Over 60's in Canberra?

Home loans for over 60's are specially designed loan products that cater to older borrowers. Unlike traditional home loans, these loans consider many factors that meet the needs of individuals over 60. 

For many, they serve as a financial lifeline to support homeownership or property investment in retirement.

Key Features of Home Loans for Over 60's

These loans come with unique features that make them suitable for borrowers in retirement or nearing it:

• Flexible Loan Terms: Typically offer shorter loan terms, aligning with seniors' financial goals.
• Access to Equity: Allows seniors to access home equity for expenses like medical costs or aged care.
• Fortnightly Payments: Options for regular, fortnightly payments to match pension or retirement income cycles.
• Negative Equity Guarantee: Protects borrowers from owing more than the value of their home.
• Exit Strategy Requirement: Plans to repay the loan through asset liquidation, reversion schemes, or inheritance arrangements.

Canberra Property Market in 2025: Insights for People Over 60’s Seeking Homeownership

Canberra's property market remains stable in 2025, with median house prices sitting at approximately $946,000 as of early this year. While prices have seen modest growth, CoreLogic data shows Canberra’s annual house price increase was around 3% over the past year, reflecting a balanced market with steady demand.

For people over 60, Canberra offers a unique blend of lifestyle benefits and investment security. The city’s high-quality healthcare facilities, ample green spaces, and community resources make it ideal for older Australians seeking a comfortable retirement. 

Canberra also has a lower crime rate and a strong support network for aged care services, making it an appealing and safe choice for older residents. With consistent property value growth, it’s also a solid market for those considering property investment as part of their retirement strategy.

Types of Home Loans for Over 60's Available in Canberra

There are several loan options tailored for people over 60 in Canberra, each designed to suit different financial needs and retirement plans. Below are some common types of loans, along with relevant government grants for older Australians.

Reverse Mortgages

A reverse mortgage loan allows people over 60 to access their home equity without immediate repayments. The loan balance grows over time and is typically repaid when the property is sold or the borrower moves into aged care. 

Home Equity Loans

With a home equity loan, homeowners can borrow against the value of their property, receiving funds as a lump sum, line of credit, or regular income stream. This option is ideal for those who are asset-rich but cash-flow-limited, allowing them to cover large expenses or supplement retirement income.

Pension Loans Scheme (PLS)

The Pension Loans Scheme is a government-backed scheme allowing retirees to receive a voluntary non-taxable fortnightly loan payment. Managed by Services Australia, this scheme uses the home as security and helps increase cash flow without impacting the age pension. 

Interest-Only Home Loans

Interest-only loans are suitable for retirees who want lower monthly repayments. Borrowers pay only the interest for a fixed period (usually up to 5 years), after which they can either start principal repayments or refinance, making it a flexible option for short-term cash management.

Standard Home Loans with Shorter Terms

Some lenders offer standard home loans with shorter terms, typically 10 to 15 years, for mature borrowers. This option allows older Australians to access funds for a home purchase or refinance without a prolonged loan term, aligning better with retirement timelines.

Line of Credit Loans

A line of credit loan provides flexible access to funds based on home equity, allowing for withdrawals as needed. This type is helpful for retirees managing ongoing expenses or unexpected costs, such as medical or aged care needs, without committing to a fixed loan amount.

Eligibility Criteria for Home Loans for Over 60's in Canberra

Securing home loans for over 60's requires meeting specific eligibility criteria. Lenders assess several factors to ensure borrowers can manage regular repayments and have a viable exit strategy.

• Income Requirements: Lenders look for a stable regular income stream, such as retirement income or age pension payments. They need proof that you can cover fortnightly loan payments or monthly repayments comfortably.
• Credit History: A solid credit history is essential to demonstrate financial reliability. Clearing credit card debt and showing timely payments can improve your loan application chances.
• Asset Requirements: Having valuable assets, like real estate or investment property, strengthens your application. Being asset rich can help offset limited income in retirement, providing lenders with extra security.
• Age Limits: Lenders typically impose a loan age limit to ensure the loan term aligns with life expectancy. Most loan products for seniors are designed with a shorter loan term or specific exit strategies in mind.
• Exit Strategy: A clear exit strategy is crucial for seniors applying for loans. This could involve selling the property, using a reversion scheme, or designating an inheritance to repay the loan balance.

Case Study

John and Sue, both in their 60s, wanted to downsize and move closer to their grandchildren in Canberra. After consulting with a mortgage broker, they found a reverse mortgage suited their needs, providing access to equity without monthly repayments. This solution helped them buy a comfortable home, while keeping financial flexibility.

They structured the loan with an exit strategy, planning to repay through asset sale if needed. With the broker’s guidance, they completed the loan application process smoothly, gaining confidence in their retirement security. Now, they enjoy their new home without the stress of monthly mortgage payments.

How to Increase Chances of Approval for Home Loans for Over 60's in Canberra

Securing a home loan for over 60's can feel challenging, but a few strategic steps can improve your odds. Here are some effective ways to strengthen your loan application and increase approval chances.

1. Improve Credit Score

A strong credit score is essential for getting loan approval. Pay off outstanding debts like credit card debt or personal loans to improve your credit profile.

2. Show Consistent Income

Document all reliable income streams, including retirement income, pension payments, or any part-time work. This gives lenders confidence in your ability to make regular repayments over time.

3. Build a Solid Exit Strategy

Lenders require a clear exit strategy for loans for seniors. Outline how you’ll repay the loan, whether through property sale, inheritance, or a reversion scheme.

4. Choose the Right Loan Type

Selecting the appropriate loan products can improve your approval chances. Discuss options like reverse mortgages or equity loans with a mortgage broker to find the best fit for your financial situation.

5. Consider a Larger Deposit

Providing a larger deposit reduces the loan balance and lowers the lender's risk. This is especially helpful with traditional home loans or investment loans in a tighter lending market.

6. Get Professional Financial Advice

Seeking independent advice or consulting with mortgage brokers helps you understand complex loan products and choose options that align with your financial position and retirement age.

FAQs

Can I get a home loan if I’m retired?

Yes, many lenders offer loans for retirees, considering factors like pension income and assets to assess eligibility.

What is a reverse mortgage, and how does it work?

A reverse mortgage allows seniors to borrow against their home equity, with no repayments required until the home is sold or the borrower moves out.

Are there age limits on home loans for over 60's?

Most lenders set a maximum age for loan term completion, often within the borrower’s life expectancy.

Do I need a specific exit strategy for my loan?

Yes, an exit strategy, such as selling the property or using a reversion scheme, is typically required to repay the loan after retirement.

How do I prove my income if I’m retired?

Income can be demonstrated through pension payments, retirement funds, or other regular income streams.

Can I still apply with a lower income?

Yes, but lenders may assess assets like property or investments to ensure repayment capacity.

Wrapping Up

Securing home loans for over 60's can be a straightforward process with the right guidance. From selecting the right loan type to building a solid exit strategy, seniors in Canberra have options that fit their unique financial situations. 

Ready to discuss your next steps? Contact our friendly team at Home Loan Broker Canberra or call 02 6173 6397 today.