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Home Loans for Pensioners
If your only income is the pension but you're keen to become a homeowner, we've got good news: although it is more difficult, Australian borrowers on pensions can get mortgages.
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Some lenders view pensioners as high-risk borrowers because they are typically older and on smaller incomes. But there are many lenders willing to offer home loans to individuals receiving pension benefits, even if you're aged in your 60s or 70s. We explain the options available and how to take the next step towards buying a home.
How can I get a home loan on a pension?
Pensioners who want to apply for a home loan should start by considering the loan from their lender's perspective. What is the most important thing to a bank? Your ability to repay the loan. Therefore, you should consider what your income and financial position looks like, as it will form the basis of getting a home loan or not.
If your only source of income is the pension, then this might limit your options as the pension amount is lower than the income level most lenders require you 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 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.
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.
Need home loan help? Speak to a mortgage broker
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 confirming the status and nature of your disability pension.
What about borrowers on disability pensions and veterans' pensions?
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.
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.
Need home loan help? Find a mortgage broker to help you
In the tables below you can compare various finance options, from normal home loans to reverse mortgages and lines of credit. If you're a pensioner and are looking for some expert guidance you can leave your details and a mortgage broker will get in touch (just click on the compare mortgage brokers tab).
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Important Information*Ask an Expert
I’m looking for a lender. Duplex ,one side rented for 315.00/wk other owner occupied price $200.000 dep $ 20,000, borrower on centrelink
Hi Terry,
Thanks for getting in touch! Pensioners can still apply for regular home loans that aren’t specific home loans for pensioners but you should keep in mind you may not be successful if you don’t meet eligibility or income requirements.
Below are the types of home loans you can apply for:
Reverse mortgages
Variable rate loans
Fixed rate loans
Line of credit loans
You can find a list of lenders when you click the type of loan on the left sidebar of this page above. 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
As a single woman on a disability pension am I eligible and how much could I be eligible for to buy a house?
Hi Jodie,
Thank you for getting in touch with Finder.
Since you are receiving a disability pension, the amount you can be eligible for a loan to buy a house depends on your income. Your chosen lender will review whether the amount of income support you receive is sufficient for you to comfortably repay the loan. I suggest that you speak to a mortgage broker on this matter for further clarification and assistance.
I hope this helps.
Thank you and have a wonderful day!
Cheers,
Jeni
I’m on disability pension so is my flat mate we are wanting to buy a home as with the rent we pay now cld have brought us a beautiful home .
So we are lookin for some one to loan one of us or the both of us home loan
Hi Michelle,
Thanks for getting in touch!
It’s helpful to know that we are not an approving body for home loans. The information above will pave the way for how to get started on that home loan application and make sure you check the eligibility requirements of a home loan. To help you find the lender that suits you, you can speak to a mortgage broker who can take your personal circumstance into account and offer you a range of borrowing options. Good luck!
Best,
Nikki
Hi,
I am 53, single and paying a mortgage on my house but need to refinance, however I am on DSP. I have equity in my house and I really don’t want to sell. My mortgage is with one of the big 4. What would my chances be of refinancing, please?
Hi Trace,
Thank you for getting in touch with Finder.
Regarding your refinancing query, it is best to speak to a mortgage broker who can take your personal circumstance into account and offer you a range of borrowing options. Having equity in the property should make it easier.
I hope this helps.
Please feel free to reach out to us if you have any other enquiries.
Thank you and have a wonderful day!
Cheers,
Jeni
Hi
Can my husband and I get a fixed, interest only 30 year $150,000 home loan on aged pensions?
Lynette
Hi Lynette,
Thank you for your question.
A fixed-rate mortgages have a variety of fixed loan terms and these are offered by many lenders in the market. Given your circumstance, you can speak to a mortgage broker who can help you find a suitable fixed home loan option for you and your husband.
Hope this has helped.
Cheers,
May
I m 73 on an aged pension [single]. I receive family tax benefits A & B.I also receives child support of $200 per week. my total income is approx $1400 per fortnight.my mortgage payments with CBA are $ 690 per fortnight [4.67% interest]. I owe $226000 on my home .its valuation is $485000. its located Marysville vic3779.how could I get a line of credit of no more than $20000
Hi Chris,
Thanks for getting in touch with Finder. I hope all is well with you. :)
While it is true that being a pensioner may limit your options, you might still be able to find a lender who can help you. First, please review the information mentioned on this page to get a better understanding of how you can get a loan as a pensioner.
If you want to get a line of credit loan. On that page, you will see a table that allows you to conveniently compare a range of personal line of credit loans. Once you’ve found the right one for you, click on the “Go to site” green button to learn more or initiate your application. Please make sure that you’ve read the relevant T&Cs or PDS of the loan products before making a decision. Moreover, check the eligibility requirements as well and consider whether the product is right for you.
I hope this helps. Should you have further questions, please don’t hesitate to reach out again.
Have a wonderful day!
Cheers,
Joshua
I am 30 and have 3 children, 2 with a Autism, I am currently on the carrer’s pension and my wife is soon to be a fully qualified nurse (full time employment) I was wondering what the chances of getting a home loan would be?
Hi Nicholas,
Thanks for getting in touch with Finder. I hope all is well with you. :)
Generally, the longer your wife is working as a nurse, meaning, she has a stable source of income, the higher your chance of getting approved. For this reason, it would be a good idea to wait 2-3 months after your wife became a full-time employee before you apply for a loan.
Moreover, if you are applying for a loan as a pensioner, your income and financial position might limit your success in getting a home loan. Of course, if you have assets that you can use as collateral or you believe you can meet lending requirements, it would be a good idea to discuss your position in person with your lender. You may also speak to a mortgage broker to further know your options.
I hope this helps. Should you have further questions, please don’t hesitate to reach out again.
Have a wonderful day!
Cheers,
Joshua
My neighbour is in her mid 60’s and currently renting. She is on a disability pension. Is there any lenders that will provide a loan with only a small deposit or can assets other than a home be used as equity?
Hi Ange,
Thanks for your question.
Generally, a person on a disability pension with no other source of income will need to deposit at least 20%. This is because there is no other salary or other sources of income that can be used to service the loan – which means little security in case of a default. Kindly note though that home loan criteria vary from lender to lender. Any other assets that may be in the borrower’s name can be used to boost the home loan application.
For expert advice on the possible options, your neighbour could get in touch with a mortgage broker.
I hope this helps. Should you have other questions, please feel free to let me know.
Cheers,
Anndy
I’m in my late 20s with a Newstart disability pension because I have anxiety. I have a partner who works part-time. I’m a full time student at TAFE at the moment and I’m only getting a small amount fortnightly from Centrelink even though I have the pension card. Would I be able to get a loan? What real estate agent would accept?
Hi Amy,
Thank you for your comment.
There are some lenders and institutions that consider pension as income, so you may be eligible for a home loan. It generally depends on how much you earn, what kind of financial situation you’re in, and what kind of payments you receive. To find out if you are eligible, read our comprehensive guides to getting a home loan on pension as well as our guide to Centrelink home loans. This will serve as your guide to getting home loans. You’re best to check with the lender your eligibility first before submitting an application.
You’re also advised to seek advise from a mortgage broker and discuss options based on your needs.
Should you wish to have real-time answers to your questions, try our chatbox on the lower right corner of our page.
Regards,
Jhezelyn
Can you advise lenders that will accept disability pension ?
Hi Kate,
Thanks for reaching out to us.
There are lenders willing to offer home loans to individuals receiving pension and disability benefits. Checking our guide above about home loans for pensioners might help. You may refer to our comparison table to see which lender/bank can you apply for a home loan with. Once you are ready, just click the ‘Go to site’ button and process your application from the main page of the lender.
Alternatively, you can speak to a mortgage broker who can take your personal circumstance into account and offer you a range of borrowing options. Just leave your details on the form on that page, as shown below, and a mortgage broker will get in touch.
Before applying, please ensure that you meet all the eligibility criteria and read through the details of the needed requirements as well as the relevant Product Disclosure Statements/Terms and Conditions when comparing your options before making a decision on whether it is right for you. You can also contact the provider if you have specific questions.
Hope this information helped.
Best regards,
Rench