home loan age restrictions

Is Age a Factor When Considering a Home Loan?

  • September 30, 2017
  • 5 min read
  • 8216 reads

How Old Is Too Old For A Mortgage?


How will my age affect me getting a mortgage?

Although legally age is not a factor when it comes to getting a mortgage the ability to earn is. If you are nearing retirement or in retirement chances are your income has dropped from what it was previously. It is possible to get a mortgage if other criteria are accepted but you must be able to prove your ability to repay the mortgage. 

Is there an age limit to getting a mortgage?

No, legally there is no age limit discrimination to getting a mortgage. The Fair Housing Act of 1968 ensures that lenders are not age discriminated. 

Can a 60 year old get a 30 year mortgage?

Yes if all other criteria are covered then age will have no factor in the application. However alternative mortgages should be considered. 

When you apply for a home loan, lenders will often impose a range of lending criteria that you must meet before you qualify to be funded. Are there any restrictions on the age of an applicant?

Your loan eligibility is often reduced if you are more than 40 years and your remaining years of service is less than 20 years. Since the tenure for a home loan is generally available for 20 years, your retirement age is taken into account.

Related: Read more personal finance guides

What is The Maximum Home Loan Age?

Actually, lenders are not supposed to discriminate against a mortgage lender based on their age. There is what is called The Equal Credit Opportunity Act (ECOA) which prohibits lenders to deny a borrower based on their age, as well as other criteria like race and gender.

However, lenders also must assume the responsibility to ensure that you can comfortably afford to repay the loan without undue financial constraints.

In the past, lenders did not place an age limit on their mortgages. However, a few have introduced age limits on their home loans which range from 65 to 75 years.

With this in mind, it might prove to be more difficult to get a home loan, the older you get. This is because lenders do look at your ability to earn an income to repay the loan.

>> Learn how to shop for a mortgage with Financer.com here.

So although you may not get rejected for age, your age is a factor in your ability to earn a wage to cover repayments. This will be taken into consideration when your application is processed.

    Are You Too Old For A 30 Year Mortgage?

  1. Do you have a current and future reliable income that will cover monthly mortgage payments for the term of the mortgage?

  2. If you are married and at an age where illness is at a higher rate are you able to financially meet your obligations if your partner passed away?

  3. If rates, insurance, and interest go up will your current income be able to manage the payments?

  4. Can you afford an alternative mortgage with higher payments now but a much shorter span such as a 15 year mortgage?

Why are Lenders Reluctant to Lend to Older Borrowers?

Lenders are more attentive in knowing if you can manage timely repayments over the life of your loan. The most important factor in view of this is your income, so if you are retired it will take some work to convince your lender to offer you a mortgage loan.

Considering that the typical term of a home loan is 30 years, it would be hard for a 65-year-old applicant to pay off their loan before their 100th birthday. This, of course, is an unacceptable level of risk to the lender.

>> Find out the pros and cons of conventional mortgages with Financer.com here.

How to Get Your Loan Application Approved

Keep these tips in mind to maximize your chances of home loan approval:

  • Have an exit strategy: lenders often require older borrowers to have a plan on what will happen next in case they retire. You may outline your plan to sell an investment property as an exit strategy.
  • Minimize debt: this is often a crucial factor a lender will look at before offering financing services. Ensure you have paid down your existing debt before you apply as this might well increase your chances of approval.
  • Save a bigger deposit: your savings at the bank is proof to lenders of your regular financial discipline. The more you save money, the more willing a lender will be willing to offer credit services.
  • Improve your credit history: a good credit rating can greatly improve your chances of obtaining a home loan even if you are advanced in age. Check for any errors in your report and obtain a report from one of the major reporting bureaus.
  • Provide more financial evidence: include strong points in your application, such as a successful previously repaid loan. It might also help if you have a sizeable retirement balance, convincing lenders that you are not a reliable borrower.

The Age Factor

Age is a factor for you personally when considering getting a mortgage. You do not want to overextend in your later years and be in a tough position where you can no longer cover your mortgage payments.

Only borrow what you need. Be realistic with your repayment time frame and reduce all your other debt loads.

You might also find helpful advice from a broker who will provide useful tips on how to get the best chances of approval.

No matter your age a mortgage loan is one of the biggest investments you will make in your life. Borrow only what you need and ensure you are able to repay the monthly payments for the foreseeable future.

Author Financer.com

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Last Updated: August 20, 2020

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