Home Loans for Age and Disability Pension Recipients
TYPES OF HOME LOANS FOR PENSIONERS
Reverse Mortgages for Age Pensioners
If you’re receiving the age pension, a reverse mortgage may be a viable way to access funds without needing a regular income.
A reverse mortgage lets you unlock the equity in your existing home and use it as security for a loan. It’s designed specifically for older Australians and can provide extra cash flow during retirement—without the need for immediate repayments.
How Does a Reverse Mortgage Work?
With a reverse mortgage, you can choose how you’d like to receive your funds:
- As a lump sum
- In regular income payments
- As a line of credit
Interest is charged on the amount you borrow, and instead of making regular repayments, the interest is added to your loan each month. This compounds over time, and the loan is typically repaid when:
- You sell the home
- Move into aged care
- Or pass away
Is a Reverse Mortgage Right for You?
This type of loan can be a helpful financial tool in retirement, but it’s only available if you already own a home with sufficient equity.
📊 Want to see how much you could access? OR 📄 Have questions?
Line of Credit Home Loans for Pensioners
A line of credit home loan allows you to access funds using the equity in your property—similar to a reverse mortgage. It gives you a pre-approved limit that you can draw from as needed, either all at once or over time.
Unlike reverse mortgages, however, line of credit loans require monthly interest-only repayments, even if you’re not actively using the full amount.
How Does It Work?
- Access funds up to a pre-set limit
- Use what you need, when you need it
- Make interest-only payments each month
- Reuse the credit as you repay it (like a credit card)
This type of loan is suitable for pensioners who already own a home with sufficient equity, and who want flexible access to funds for things like renovations, medical expenses, or day-to-day living costs.
Things to Consider
While a line of credit loan offers flexibility, it’s important to be aware of the risks:
- These loans often come with higher interest rates
- Costs can add up quickly if the balance isn’t managed carefully
- You must continue to make monthly payments, regardless of income
Is It Right for You?
If you’re a pensioner with equity in your home and are comfortable making interest-only payments, a line of credit home loan can be a useful financial tool.
Talk to our team or request a call back to see if this option fits your needs.
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Investment Home Loans for Pensioners
If you’re receiving the age pension, you may still be eligible for an investment home loan—even if you’re retired.
While options like reverse mortgages and line of credit loans are suited to those who already own property, an investment loan can be a good solution if you’re looking to buy a new property and generate rental income.
How Investment Loans Work
Lenders may consider your potential rental income when assessing your application. This means that even if you’re on a pension, the income from the property could help you qualify for a loan.
If your investment property is positively geared, the rental income may:
- Cover some or all of your mortgage repayments
- Provide an extra income stream during retirement
Want to Know What You Can Borrow?
Use our free Home Loan Quick Quote tool to estimate your borrowing power and see if an investment loan is a suitable option.
Important to Know
Contact Centrelink’s Financial Information Service on 132 300 for personalised guidance.
Home Loans for Pensioners (AGE & DISABILITY PENSION)
Getting a home loan as a pensioner can be more difficult, as lenders often consider older borrowers or those on a pension to be higher risk. This can affect how much you’re able to borrow.
However, IT IS still possible to get a mortgage, even if you’re on a pension or applying later in life. The key is understanding what lenders look for and how to strengthen your application.
Disability Pension Home Loans
If you’re receiving a disability pension, the good news is that many lenders accept it as a genuine form of income. This means your application may be assessed much like any other home loan.
To confirm your eligibility, you’ll need to provide:
· An Income Statement from Centrelink confirming your benefit amount and payment frequency – That’s IT!
Your ability to qualify for a home loan will depend on your overall financial situation—including your income, expenses, and any existing debts. Out finance specialists will go over your particular situation.
Want to Know What You Could Borrow?
Use our Free Home Loan Quick Quote tool to estimate how much you might be able to borrow with your disability pension.
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