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Home Loans for Pensioners

While it is harder, you can get a home loan while on a pension. It depends on how much you want to borrow, your spending, assets and if you have other income sources.

Key takeaways

  • Lenders view pensioners as higher-risk borrowers for home loans because they are typically older and on smaller incomes.
  • A lender may be willing to offer a home loan to a pensioner, and may consider your pension as a form of income when assessing your application.
  • A broker can help you look for loans and lenders that match your requirements. Their services are typically free to you because the lender you choose will pay them a commission

Getting a loan as a pensioner always comes down to the lender's eligibility criteria and your individual circumstances. This includes your savings and other sources of income, whether you have outstanding debts or not and the amount you are hoping to borrow.

How can I get a home loan on a pension?

If your only source of income is the pension, then this might limit your options. The pension amount is lower than the income level most lenders require you to earn in order to repay a loan.

However, there are several ways a pensioner can apply for mortgage finance. The best option for you depends on your financial situation.

1) Apply for a standard home loan

If you have forms of income from other sources or you are only borrowing a small amount, you may be able to apply for a home loan like any other borrower. If this is your situation you might be able to get a competitive interest rate, so be sure to compare your home loan options.

2) Apply with a specialist lender

There are lenders who specialise in providing finance solutions to borrowers in difficult or unique circumstances. There are even lenders who focus entirely on older borrowers. These types of lenders provide loans known as specialist or non-conforming loans.

Non-conforming lenders may be able to help where the big banks can't. But they often charge higher interest rates and fees.

Keep in mind that many lenders that specialise in "senior's finance" don't actually lend to pensioners who don't already own property. Instead they offer reverse mortgages and other forms of equity access to older Australians who already own property.

3) Talk to a mortgage broker

Perhaps the best option for pensioners looking for a home loan is to get in touch with a mortgage broker. This is because mortgage brokers specialise in helping borrowers in unique circumstances and they have access to a wide panel of lenders.

A broker can help you look for loans and lenders that match your requirements. Their services are typically free to you because the lender you choose will pay them a commission.

What documents do pensioners need for a home loan?

As a pensioner you will need to provide a few extra documents in addition to the standard documents in a mortgage application. Every lender has their own requirements but you'll generally need to provide the following:

  • Evidence of funds to complete the deposit.
  • Bank statements showing Centrelink benefits being paid into your bank account (i.e. some lenders require 6 months of recent bank statements).
  • Letter from Centrelink (or other relevant government department) confirming the status and nature of your disability pension.

What about borrowers on disability pensions and veterans' pensions?

Disability Support pensions

Generally, lenders consider a disability pension to be a valid form of income, meaning they treat a home loan application for someone on a disability pension just like any other application.

Most lenders will review your application on a case-by-case basis. Your eligibility for a home loan will depend on the amount of income you receive and how much of this can be used to service a loan.

Other factors including your age, assets and debts will be assessed by a lender on an individual basis.

Veterans' pensions

Many lenders may accept a Veterans' Pension as a source of income for a home loan. This applies if you are receiving:

  • War Widow's or Widow's Pension
  • Service Pension
  • Veterans' Affairs Age Pension

Additionally, lenders may accept the Department of Veterans' Affairs Incapacity Pension as a source of income. In order to demonstrate your pension as a source of income for a home loan application, you'll need either a current bank statement showing your pension payment, or a current Department of Veterans' Affairs statement.

On Centrelink? You could still get a home loan

Other mortgage types for older borrowers

If you're a pensioner who already owns their own home you have some other finance options. Both reverse mortgages and line of credit loans allow you to borrow money against the equity in your home.

  • Reverse mortgages. A reverse mortgage allows you to borrow funds using equity from your home as security for the loan. A reverse mortgage can either be paid as a lump sum, a regular stream of income, a line of credit or a combination of these. No income is needed to qualify and for this reason, the interest rate tends to be higher. You must repay the sum of borrowed money when you sell your home, pass away or move into aged care.
  • Line of credit loans. A line of credit is a funding line that uses the equity in your home. It’s an approved amount that you can use a bit at a time or all at once. You loan is approved against a security and you can draw on this loan amount at any time. You only pay the interest on the amount that you use. For example, if you get a line of credit of $200,000 and only use $50,000, you only pay interest on the $50,000. These types of loans can be harder to get, and not all lenders offer them.

Looking to compare loan options?

In the tables below you can compare various finance options, from normal home loans to reverse mortgages and lines of credit. Please be aware that not all of the options presented in the table will be available for pensioners. If you're a pensioner and are looking for expert guidance, contact a mortgage broker for personal advice.

Compare reverse mortgages

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Name Finder Score Interest Rate p.a. Comparison Rate p.a. Fees Monthly Payment
Heartland Reverse Mortgages logo
Principal & InterestInterest only50% min. depositOwner-occupier
Heartland Reverse Mortgages logo
Principal & InterestInterest only50% min. depositOwner-occupier
Go to site
Product NameHeartland Standard Reverse Mortgage
Interest Rate Typevariable rate
Repayment Type Principal & Interest Interest Only
Interest Rate p.a.9.75%
Comp. Rate p.a.9.78%
Minimum Loan Amount$5,000
Maximum Loan Amount N/A
Maximum Loan Term
Maximum LVR 50%
Loan Redraw FacilityYes
Offset AccountNo
Split Loan FacilityNo
Fixed Interest OptionNo
Loan PortableYes
Extra Repayments Yes
Finder score
Interest Rate
9.75%
Comparison Rate
9.78%
Fees
Application: $0
Ongoing: $0 p.a.
Monthly Payment
$1,290
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G&C Mutual Bank logo
Interest only60% min. deposit
G&C Mutual Bank logo
Interest only60% min. deposit
Go to site
Product NameG&C Mutual Bank Retirees Access Home Loan
Interest Rate Typevariable rate
Repayment Type Interest Only
Interest Rate p.a.9.22%
Comp. Rate p.a.9.30%
Minimum Loan Amount$200,000
Maximum Loan Amount N/A
Maximum Loan Term30 years
Maximum LVR 40%
Loan Redraw FacilityYes
Offset AccountNo
Split Loan FacilityNo
Fixed Interest OptionNo
Loan PortableYes
Extra Repayments Yes
Finder score
Interest Rate
9.22%
Comparison Rate
9.30%
Fees
Application: $500
Ongoing: $0 p.a.
Monthly Payment
$1,232
Go to site
Household Capital logo
Principal & Interest50% min. depositOwner-occupier
Household Capital logo
Principal & Interest50% min. depositOwner-occupier
Product NameHousehold Capital Reverse Mortgage Variable Home Loan
Interest Rate Typevariable rate
Repayment Type Principal & Interest
Interest Rate p.a.9.20%
Comp. Rate p.a.9.23%
Minimum Loan Amount$50,000
Maximum Loan Amount $1,000,000
Maximum Loan Term
Maximum LVR
Loan Redraw FacilityNo
Offset AccountNo
Split Loan FacilityNo
Fixed Interest OptionNo
Loan PortableYes
Extra Repayments Yes
Finder score
Interest Rate
9.20%
Comparison Rate
9.23%
Fees
Application: $950
Ongoing: $0 p.a.
Monthly Payment
$1,230
Express Reverse Mortgage logo
Principal & InterestOwner-occupier
Express Reverse Mortgage logo
Principal & InterestOwner-occupier
Product NameExpress Reverse Mortgage
Interest Rate Typevariable rate
Repayment Type Principal & Interest
Interest Rate p.a.8.65%
Comp. Rate p.a.8.67%
Minimum Loan Amount$20,000
Maximum Loan Amount $50,000
Maximum Loan Term
Maximum LVR N/A
Loan Redraw FacilityNo
Offset AccountNo
Split Loan Facility
Fixed Interest OptionNo
Loan PortableNo
Extra Repayments Yes
Finder score
Interest Rate
8.65%
Comparison Rate
8.67%
Fees
Application: $395
Ongoing: $0 per month
Monthly Payment
$1,171
Heartland Reverse Mortgages logo
Principal & InterestInterest only66.25% min. depositInvestment
Heartland Reverse Mortgages logo
Principal & InterestInterest only66.25% min. depositInvestment
Product NameHeartland Secondary Property Reverse Mortgage
Interest Rate Typevariable rate
Repayment Type Principal & Interest Interest Only
Interest Rate p.a.9.75%
Comp. Rate p.a.9.78%
Minimum Loan Amount$5,000
Maximum Loan Amount N/A
Maximum Loan Term
Maximum LVR 33.75%
Loan Redraw FacilityYes
Offset AccountNo
Split Loan FacilityNo
Fixed Interest OptionNo
Loan PortableYes
Extra Repayments Yes
Finder score
Interest Rate
9.75%
Comparison Rate
9.78%
Fees
Application: $0
Ongoing: $0 p.a.
Monthly Payment
$1,290
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Showing 5 of 5 results

Compare line of credit loans

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Name Finder Score Interest Rate p.a. Comparison Rate p.a. Fees Monthly Payment
Commonwealth Bank logo
Principal & InterestInterest only20% min. deposit
Commonwealth Bank logo
Principal & InterestInterest only20% min. deposit
Product NameCommonwealth Bank Viridian Line of Credit
Interest Rate Typevariable rate
Repayment Type Principal & Interest Interest Only
Interest Rate p.a.10.28%
Comp. Rate p.a.
Maximum Loan Term
Maximum LVR 80%
Loan Redraw FacilityYes
Offset AccountNo
Split Loan FacilityNo
Fixed Interest OptionNo
Loan PortableNo
Extra Repayments Yes
Finder score
Interest Rate
10.28%
Comparison Rate
Fees
Application: $0
Ongoing: $395 p.a.
Monthly Payment
$1,349
Enquire Now
Well Money logo
Principal & Interest40% min. depositOwner-occupierOffset account
Well Money logo
Principal & Interest40% min. depositOwner-occupierOffset account
Product NameWell Money Equity Plus
Interest Rate TypeVariable rate
Repayment Type Principal & Interest
Interest Rate p.a.6.16%
Comp. Rate p.a.6.19%
Minimum Loan Amount$200,000
Maximum Loan Amount $20,000,000
Maximum Loan Term30 years
Maximum LVR 60%
Loan Redraw FacilityYes
Offset AccountYes
Split Loan FacilityYes
Fixed Interest Option
Loan Portable
Extra Repayments Yes
Finder score
Interest Rate
6.16%
Comparison Rate
6.19%
Fees
Application: $250
Ongoing: $0 p.a.
Monthly Payment
$916
Greater Bank logo
Principal & InterestInterest only10% min. depositOwner-occupier
Greater Bank logo
Principal & InterestInterest only10% min. depositOwner-occupier
Product NameGreater Bank Ultimate Line of Credit Home Loan
Interest Rate Typevariable rate
Repayment Type Principal & Interest Interest Only
Interest Rate p.a.8.10%
Comp. Rate p.a.
Maximum Loan Term30 years
Maximum LVR 90%
Loan Redraw FacilityYes
Offset AccountNo
Split Loan FacilityYes
Fixed Interest OptionNo
Loan PortableNo
Extra Repayments Yes
Finder score
Interest Rate
8.10%
Comparison Rate
Fees
Application: $500
Ongoing: $0 p.a.
Monthly Payment
$1,112
AMP Bank logo
Interest only20% min. depositInvestmentOffset account$100K to
AMP Bank logo
Interest only20% min. depositInvestmentOffset account$100K to
Product NameAMP Bank Professional Package Line of Credit
Interest Rate Typevariable rate
Repayment Type Interest Only
Interest Rate p.a.7.19%
Comp. Rate p.a.7.43%
Minimum Loan Amount$100,000
Maximum Loan Amount $499,999
Maximum Loan Term30 years
Maximum LVR 80%
Loan Redraw FacilityYes
Offset AccountYes
Split Loan FacilityYes
Fixed Interest OptionNo
Loan PortableYes
Extra Repayments Yes
Finder score
Interest Rate
7.19%
Comparison Rate
7.43%
Fees
Application: $0
Ongoing: $349 p.a.
Monthly Payment
$1,018
Hume Bank logo
Interest only20% min. depositOwner-occupier
Hume Bank logo
Interest only20% min. depositOwner-occupier
Product NameHume Bank Line of Credit Loan
Interest Rate Typevariable rate
Repayment Type Interest Only
Interest Rate p.a.9.25%
Comp. Rate p.a.
Maximum Loan Term25 years
Maximum LVR 80%
Loan Redraw FacilityNo
Offset AccountNo
Split Loan FacilityYes
Fixed Interest OptionYes
Loan PortableYes
Extra Repayments Yes
Finder score
Interest Rate
9.25%
Comparison Rate
Fees
Application: $600
Ongoing: $0 p.a.
Monthly Payment
$1,235
bcu logo
Principal & InterestInterest only21% min. depositOwner-occupier
bcu logo
Principal & InterestInterest only21% min. depositOwner-occupier
Product NameBCU All-In-One Line of Credit
Interest Rate Typevariable rate
Repayment Type Principal & Interest Interest Only
Interest Rate p.a.7.74%
Comp. Rate p.a.
Maximum Loan Term
Maximum LVR 79%
Loan Redraw FacilityNo
Offset AccountNo
Split Loan FacilityYes
Fixed Interest OptionNo
Loan PortableYes
Extra Repayments Yes
Finder score
Interest Rate
7.74%
Comparison Rate
Fees
Application: $0
Ongoing: $0 p.a.
Monthly Payment
$1,075
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Showing 6 of 6 results

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To provide a Score, we compare like-for-like loans. So if you're comparing the best home loans for cashback, you can see how each home loan stacks up against other home loans with the same borrower type, rate type and repayment type. We also take into consideration the amount of cashback offered when calculating the Score so you can tell if it's really worth it.

Read the full Finder Score breakdown

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To make sure you get accurate and helpful information, this guide has been reviewed by Rebecca Pike, a member of Finder's Editorial Review Board.
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Richard Whitten is a money editor at Finder, and has been covering home loans, property and personal finance for 6+ years. He has written for Yahoo Finance, Money Magazine and Homely; and has appeared on various radio shows nationwide. He holds a Certificate IV in mortgage broking and finance (RG 206), a Tier 1 Generic Knowledge certification and a Tier 2 General Advice Deposit Products (RG 146) certification. See full bio

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136 Responses

    Default Gravatar
    MaritessJanuary 4, 2017

    I just want to know if i can borrow personal loan payable in 3 yrs ty

      Default Gravatar
      NikkiSeptember 28, 2019

      Hi Maritess,

      Thanks for getting in touch!

      You can find and compare your options using our table with a list of brands offering pensioner loans. You can click the name of the lender to be redirected to our review page and learn more about the lender’s loan offer, rates, and requirements as well as the pros and cons of using their loan service. When you are ready, you may then click on the “Go to site” button if available and you will be redirected to the lender’s website where you can proceed with the application or get in touch with their representatives for further inquiries you may have.

      As a friendly reminder, carefully review the eligibility criteria of the loan before applying to increase your chances of approval. Read up on the terms and conditions and product disclosure statement and contact the bank should you need any clarifications about the policy.

      Hope this helps!

      Best,
      Nikki

      AvatarFinder
      DeeJanuary 4, 2017Finder

      Hi Maritess,

      Thanks for reaching out.

      We feature a number of personal loan products on our website with a repayment period of 3 years or more.

      Before you apply, you may want to check first your credit score and help you in identifying your possible options.

      Cheers,
      Anndy

    Default Gravatar
    JessNovember 11, 2016

    My question is im on a disability pension and my mother-in-law wants to help me out get a home loan we got 2000 deposit plus a caravan worth 80000 is there anyway we can get a home loan now

      AvatarFinder
      HaroldNovember 11, 2016Finder

      Hello Jess,

      Thank you for your question.

      For eligibility requirements, some home loans will require you to meet certain eligibilities in order to take out that home loan. This may include regular source of income, a good credit history and more. Pensioners in particular should compare the eligibility requirements of home loans because some may be more appropriate to apply for than others. Like any applicant for a home loan, the lender will review whether the amount of income support you receive is sufficient for you to comfortably repay the loan. For more information on this page, please navigate through “Home Loan Offers” section and you will see the options we’ve listed there.

      I hope this information has helped.

      Cheers,
      Harold

    Default Gravatar
    JeppeNovember 10, 2016

    I was enquiring about a home loan, and was amazed when I was told that our franking credit from our shares was not used when our income was calculated and also a small pension from overseas.
    The amount of these are around $25000.
    Im 68 and self funded retiree and this also had a bearing on the loan, but this I can understand, the ATO have another way of looking at our franking credits, they use it as income, It looks to me as an uneven playing ground.
    Your answer whatever it may be will be welcome.

      AvatarFinder
      HaroldNovember 16, 2016Finder

      Hello Jeppe,

      Thank you for your question.

      Each lender has their own lending criteria, and you may choose to accept or ignore different income streams. Another option is to seek a different lender to see if their lending policy includes franking credits, or speak to a mortgage broker and find out which lenders may be better to approach.

      I hope this information has helped.

      Cheers,
      Harold

    Default Gravatar
    LynnNovember 4, 2016

    Hi Finder – my question is if a pensioner apply for a home loan and has a boarder (wife) who works permanently be counted as income and help with being able to acquire a loan. Thank you

      AvatarFinder
      HaroldNovember 4, 2016Finder

      Hello Lynn,

      Thanks for your question.

      Basically, the pensioners applying for home loans must keep in mind that their income and financial position might limit their success in getting a home loan. This is mainly because the pension is lower than the normal income of other applicants who are applying and the income level required. If you have assets and believe you can meet lending requirements, it might be a good idea to discuss your position in person with your financial provider or mortgage broker, as applying online may be difficult if you can’t demonstrate your capacity to repay the loan. Also keep in mind that a small number of home loan lenders will set an age limit for different products, so be sure to check the terms and conditions before applying.

      With regards to your specific concern you may need to speak with a financial provider or mortgage broker to give you a proper guidance regarding this matter.

      I hope that helps.

      Cheers,
      Harold

    Default Gravatar
    MikeJune 9, 2016

    Hi Finder

    I would be very pleased if you could clarify the below query for me?

    Your site states that on the day you apply for the age pension you must be in Australia and “a resident”

    What exactly does be a resident mean?

    Regards

    Mike

      AvatarFinder
      ElizabethJune 10, 2016Finder

      Hi Mike,

      To be a resident you need to be living in Australia and either:
      an Australian citizen
      a permanent visa holder, or
      a protected Special Category visa (SCV) holder

      You need to have been an Australian resident for a continuous period of ten years to be eligible for the pension. You can find out more on the Department of Human Services website.

      Hope this helps,

      Elizabeth

      Default Gravatar
      MikeJune 10, 2016

      Hi Finder / Elizabeth

      Thank you very much for responding to my above query so quickly!

      I have one more question if that’s possible

      Q – If you are receiving the pension in Australia, how long are you allowed to spend out of country (eg on holiday), per trip, and how long in total per year?

      Regards Mike

      AvatarFinder
      ElizabethJune 10, 2016Finder

      Hi Mike,

      No worries. Your pension rate will not change unless you take a holiday for more than six weeks or decide to move out of Australia permanently. You’ll need to notify the Department of your travel plans if this is the case. If you travel for longer than six weeks you will be paid an “outside Australia” rate, your pension supplement will reduce to the basic rate and your energy supplement will stop.

      If you travel outside of Australia for 26 weeks the rules are different. After 26 weeks your rate will be based on how long you have lived in Australia as an Australian resident between the age of 16 and age pension age.

      I hope this information has helped,

      Elizabeth

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