Finder makes money from featured partners, but editorial opinions are our own.
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.
Lenders view pensioners as higher-risk borrowers for home loans because they are typically older and on smaller incomes. But 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.
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.
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.
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.
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 to supply 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.
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.
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.
You won't pay any more by taking out a home loan with us. Better still, we regularly run exclusive deals that you won't find on any other site – plus, our tables make it easy to compare loans.
We're experts
We've researched and rated dozens of home loans as part of our Finder Awards. We provide unique insights and our in-house experts regularly appear on Sunrise, 7News and SBS News.
We're independent
Unlike other comparison sites, we're not owned by a third party. That means our opinions are our own and we work with lots of home loan lenders, making it easier for you to find a good deal.
We're here to help
Since 2014, we've helped 150,000+ people find a home loan by explaining the nitty gritty details simply and clearly. We'll never ask for your number or email. We're here to help you make a decision.
Frequently asked questions about Home Loans for Pensioners
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 income level most lenders require.
There are several ways a pensioner can apply for mortgage finance. The best option for you depends on your financial situation.
Apply for a standard home loan If you have forms of income from other sources or 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 very competitive interest rate, so be sure to compare your options.
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.
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.
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 confirming the status and nature of your disability pension.
Disability 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.
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.
Home loan cashback deals can help you refinance to a cheaper interest rate and get a lump sum cash payment. Compare the latest deals and check your eligibility today.
I am currently on a disability pension. I am interested in trying to obtain a home loan of $120 000.00 to purchase my father’s house. The house is worth at least $200 000.00 -$240 000.00 but he is only wanting $140 000.00 as apart of a inheritance I would eventually receive when he passes. I have $20 000.00 as a deposit and I have 900+ credit rating. I can also show that I have paid rent to my father for over 4 + years of $400.00 per fortnight. Would I be eligable or if not how much would a approx need in a second 8ncome to be eligable
It’s hard for me to say specifically what you’d be eligible for, as every lender has different criteria. Not all of them accept a disability pension as a form of income.
I suggest contacting some lenders before applying fully, or talking to a mortgage broker.
I am a 69y.o on disability support pension. My wife is a 66y.o on carer allowance and payment, making our joint income $1676.10 per fortnight. In addition I receive a small annuity from the UK each month, of around $50 and a UK military pension per month of about $400. Both of these fluctuate with the exchange rate. We would like to downsize. We currently have a mortgage with Homestart, which stands at $255045.72. Unfortunately I believe we were slightly mislead as to the flexibility of this mortgage when we took it on almost 6 years ago, and it is now impeding our ability to downsize, or in fact do almost anything we need to do. Throughout the entire mortgage period we have never been missed, or been late with, any payment. prior to that we rented for over 8 years, and, again never missed a payment, on, what was then, a very high rental rate.
My wife and I contacted several banks and financial institutions and were told either that our ages were a barrier, or that they didn’t accept applicants whose sole income was from centrelink. On a personal note,, with no supporting evidence feels this disgusts me. It is discriminatory and presumptive. We both have high credit ratings for a reason, we know how to handle our finances, and to assume that we are potential defaulters, based solely on our source of income, smacks of defamatory reasoning.
All besides the point, since our aim is to find someone who will base their decisions on facts, and not simple data averaging or preconceived ideas.
We are seeking either a mortgage, whereby we aim to sell our existing property, whose posted value, as of today,is between $430k – $489k and $550k. We would then seek to buy another, slightly smaller, and less expensive property in the same general area. From the sale we would repay the existing mortgage, hold $40k for costs and stamp duty, hopefully have $50k towards any necessary home upgrades, and a reliable car, and place the remainder as the deposit on the new dwelling. I calculate that this would be around $80k at the lower end price, or slightly over 20% of the typical property price that we are looking for.
Our second option would be what I believe is called a reverse mortgage, which I admit I don’t understand very well. In this case I would hope that we can gain access to $50k. This would allow us to replace our old fencing, upgrade our solar panels and purchase a reliable vehicle.
Hopefully this is enough information to help you with some advice.
I’m sorry to hear about the experience you’ve been having. Unfortunately, as a comparison site, we’re not really in a position to offer any kind of advice.
You’d probably benefit from talking to a mortgage broker who can work through your specific set of circumstances with you and offer some potential solutions.
Given that your borrowing situation is a little complicated, you might want to contact a mortgage broker to get some personalized advice and a clear idea of what your options are. They can help you look for loans and lenders that match your requirements.
My son is on a disability pension and he works, I’m on a cares pension and I work too. Is my son able to get a home loan as he’s never owned a house before.
Yes. There are lenders that may consider your son’s disability pension to be a valid form of income.
Most lenders will review your application on a case-by-case basis. His eligibility for a home loan will also depend on the amount of income he receives and how much of this can be used to service a loan. Other factors including his age, assets, and debts will be assessed.
I’m on a disability pension, could you please help with getting a home loan. I’m want $ 330,000 for the 3 bedroom home I’m looking at , I do have a small deposit.
Kind regards
Racheal McDonald
It can be possible to get a home loan when your main income is a disability pension. However, it’s quite difficult to qualify for finance if the pension is your only source of income.
Your best bet is to contact a mortgage broker to get some personalised advice and a clear idea of what your options are. You can google mortgage brokers in your area or visit our Finder page about mortgage brokers.
How likely would you be to recommend finder to a friend or colleague?
0
1
2
3
4
5
6
7
8
9
10
Very UnlikelyExtremely Likely
Required
Thank you for your feedback.
Our goal is to create the best possible product, and your thoughts, ideas and suggestions play a major role in helping us identify opportunities to improve.
Important information about this website
finder.com.au is one of Australia's leading comparison websites. We are committed to our readers and stands by our editorial principles
We try to take an open and transparent approach and provide a broad-based comparison service. However, you should be aware that while we are an independently owned service, our comparison service does not include all providers or all products available in the market.
Some product issuers may provide products or offer services through multiple brands, associated companies or different labeling arrangements. This can make it difficult for consumers to compare alternatives or identify the companies behind the products. However, we aim to provide information to enable consumers to understand these issues.
We make money by featuring products on our site. Compensation received from the providers featured on our site can influence which products we write about as well as where and how products appear on our page, but the order or placement of these products does not influence our assessment or opinions of them, nor is it an endorsement or recommendation for them.
Products marked as 'Top Pick', 'Promoted' or 'Advertisement' are prominently displayed either as a result of a commercial advertising arrangement or to highlight a particular product, provider or feature. Finder may receive remuneration from the Provider if you click on the related link, purchase or enquire about the product. Finder's decision to show a 'promoted' product is neither a recommendation that the product is appropriate for you nor an indication that the product is the best in its category. We encourage you to use the tools and information we provide to compare your options.
Where our site links to particular products or displays 'Go to site' buttons, we may receive a commission, referral fee or payment when you click on those buttons or apply for a product. You can learn more about how we make money.
When products are grouped in a table or list, the order in which they are initially sorted may be influenced by a range of factors including price, fees and discounts; commercial partnerships; product features; and brand popularity. We provide tools so you can sort and filter these lists to highlight features that matter to you.
Please read our website terms of use and privacy policy for more information about our services and our approach to privacy.
I am currently on a disability pension. I am interested in trying to obtain a home loan of $120 000.00 to purchase my father’s house. The house is worth at least $200 000.00 -$240 000.00 but he is only wanting $140 000.00 as apart of a inheritance I would eventually receive when he passes. I have $20 000.00 as a deposit and I have 900+ credit rating. I can also show that I have paid rent to my father for over 4 + years of $400.00 per fortnight. Would I be eligable or if not how much would a approx need in a second 8ncome to be eligable
Hi Lauren,
It’s hard for me to say specifically what you’d be eligible for, as every lender has different criteria. Not all of them accept a disability pension as a form of income.
I suggest contacting some lenders before applying fully, or talking to a mortgage broker.
I am a 69y.o on disability support pension. My wife is a 66y.o on carer allowance and payment, making our joint income $1676.10 per fortnight. In addition I receive a small annuity from the UK each month, of around $50 and a UK military pension per month of about $400. Both of these fluctuate with the exchange rate. We would like to downsize. We currently have a mortgage with Homestart, which stands at $255045.72. Unfortunately I believe we were slightly mislead as to the flexibility of this mortgage when we took it on almost 6 years ago, and it is now impeding our ability to downsize, or in fact do almost anything we need to do. Throughout the entire mortgage period we have never been missed, or been late with, any payment. prior to that we rented for over 8 years, and, again never missed a payment, on, what was then, a very high rental rate.
My wife and I contacted several banks and financial institutions and were told either that our ages were a barrier, or that they didn’t accept applicants whose sole income was from centrelink. On a personal note,, with no supporting evidence feels this disgusts me. It is discriminatory and presumptive. We both have high credit ratings for a reason, we know how to handle our finances, and to assume that we are potential defaulters, based solely on our source of income, smacks of defamatory reasoning.
All besides the point, since our aim is to find someone who will base their decisions on facts, and not simple data averaging or preconceived ideas.
We are seeking either a mortgage, whereby we aim to sell our existing property, whose posted value, as of today,is between $430k – $489k and $550k. We would then seek to buy another, slightly smaller, and less expensive property in the same general area. From the sale we would repay the existing mortgage, hold $40k for costs and stamp duty, hopefully have $50k towards any necessary home upgrades, and a reliable car, and place the remainder as the deposit on the new dwelling. I calculate that this would be around $80k at the lower end price, or slightly over 20% of the typical property price that we are looking for.
Our second option would be what I believe is called a reverse mortgage, which I admit I don’t understand very well. In this case I would hope that we can gain access to $50k. This would allow us to replace our old fencing, upgrade our solar panels and purchase a reliable vehicle.
Hopefully this is enough information to help you with some advice.
Hi Alan,
I’m sorry to hear about the experience you’ve been having. Unfortunately, as a comparison site, we’re not really in a position to offer any kind of advice.
You’d probably benefit from talking to a mortgage broker who can work through your specific set of circumstances with you and offer some potential solutions.
Regards,
Rebecca
Me and my wife and son we all on a Dissabilty Pension can same help us with home loans we looking at $500,000 for home and land packages
Hi Giovanni,
Given that your borrowing situation is a little complicated, you might want to contact a mortgage broker to get some personalized advice and a clear idea of what your options are. They can help you look for loans and lenders that match your requirements.
All the best,
Richard
My son is on a disability pension and he works, I’m on a cares pension and I work too. Is my son able to get a home loan as he’s never owned a house before.
Hi Jill,
Yes. There are lenders that may consider your son’s disability pension to be a valid form of income.
Most lenders will review your application on a case-by-case basis. His eligibility for a home loan will also depend on the amount of income he receives and how much of this can be used to service a loan. Other factors including his age, assets, and debts will be assessed.
A mortgage broker might be able to help you too.
Kind regards,
Richard
I’m on a disability pension, could you please help with getting a home loan. I’m want $ 330,000 for the 3 bedroom home I’m looking at , I do have a small deposit.
Kind regards
Racheal McDonald
Hi Racheal,
It can be possible to get a home loan when your main income is a disability pension. However, it’s quite difficult to qualify for finance if the pension is your only source of income.
Your best bet is to contact a mortgage broker to get some personalised advice and a clear idea of what your options are. You can google mortgage brokers in your area or visit our Finder page about mortgage brokers.
Hope this helps!
Sarah