60 years old 30 year mortgage?

I am 60 years old
No debt - good finance history
Permanent job
Earning 100k net p.a
Have $180k in the bank

can I get a 30 year mortgage on a $800k house
CBA bank manager says only 15year mortgage

Thank you

 

To invest or to live in? What's your exit strategy? How are you planning to repay the loan after your retirement?

 

Hi Leon,
Do engage the service of an experienced mortgage broker . S/he could better advise you and also has access to a wider pool of lenders. Personally I did not have as much success when I tried approaching the lenders myself.

 

18 months ago when I was 63 and wife was 64, our bank approved a $1M loan with a 25 year term, first 5 years is I/O.

We submitted a very strong business case with our application including a detailed asset/liability list, detailed cashflow projections, detailed exit strategy, ...

 

It’s for a my PPOR but if this makes it difficult I would have it as an investment as I would like to get in the market

my exit strategy is: inflation is coming and i need to protect my wealth and I am choosing property for this

 

If you tell a bank that, it won't be helpful in persuading a bank to lend to you.

The bank wants to make sure they can get their money back in case something happens to you (loss of job, death, inability to work etc).
How can you convince them that you are a good risk?

If I was the bank, I'd even think giving you a 15 year term is on the generous side cause who knows how your health and fitness will be be like.

Sorry but the likelihood of staying in good health decreases as you get older, compare yourself and your cohort to a 40 year old. Of course, you might be fine. But, if you wanted a 30 year term... do you expect to still be able to earn your income as a 90 year old?

 

No answers just your 2c. Wonderfull

 

What would you consider a good exit strategy? I plan to live till 120 years so 60 more years to go hence 30 year mortgage is appropriate

Seriously, how can you convince the bank that their money is safe and can be recovered if you can no longer pay debt off. I guess a low LVR could bring their mind to peace.

Cheers
Oracle

 

Yes it is possible for a 60 year old to get a 30 year loan.

 

What would be the conditions? Such as max LVR, etc.

 

as per normal really.

 

Structure the investment so it is no longer dependant upon a person supporting the loan.

 

Do you mean company or trust structure to own the property in?

If so that would not be easy to do if property already owned in personal name. Capital gains would be high to not make it worthwhile. Also with residential property which I believe the OP was referring to in his post and so was I is generally purchased under personal names for maximum tax benefit like negative gearing and capital gains discount.

Also with residential property purchased in company name or trust because the yield is not high to cover expenses and P&I payments. Which means the lender would ask director guarantees and if you are the director and 60 years old you may face same problems.

So what is a good exit strategy if you are 60 and want 30 year mortgage for residential property?

Cheers
Oracle

 

if you can get a 30 year loan it will pay itself off as 30 years is generally the maximum loan term. So you won't neccessarily need an exit strategy.
Many will have enough money in super to pay out the loan on the property - a possibility which they probably should not end up doing.

 

That is not an exit strategy; that is wishful thinking .

In our case, our property portfolio is around $50,000 cashflow positive. So, in less than 20 years, our Offset will be full.

Should the cashflow from our property portfolio take a hit, our Plan B is to use the excess from our SMSF mandatory pension payments (will increase to 5% in six months time). More than enough to fund our lifestyle.

Plan C is to use some of our SMSF funds as @Terry_w posted.

BTW, it has to be a plausible exit strategy, backed up by reality. But that doesn’t mean the bank will/can force one to implement it; more suitable options might come one’s way .

 

I shifted to commercial in 1994 (& not sold anything) and have been paying taxes every year since.(income tax is now more than my interest cost , next year's tax is likely to exceed all expenses combined)
The banks are not concerned with PG when the LVR is in the thirties and the interest is covered three times and more.
The company, property and lease is more important than the person.

 

Mr K, I didn't realise you were that old. I imagined a sprightly man full of vigour and zest.

 

Lenders want to know how you'll afford or pay off the loan when you reach retirement age. In many cases they'll assume you'd retire at 75, hence in this example the CBA is offering a 15 year loan term.

It's not a big deal for investment loans. You sell the investment property, make a profit and the loan is paid off. Easy.

If it's your own home you're buying, they look a bit deeper. If there's other properties or significant assets you can sell, that's a valid exit strategy. Selling your own home isn't an exit strategy because lenders will then ask where you'd live after you sell the house.

Many people will argue that they'd downsize. This is possible, but you need to make the case for what you'd downsize into. Lenders won't assume that prices will go up on your home, because they'd also go up on the house you want to buy. In essence you need to start with a very significant deposit to make this argument successfully.

What lenders really are trying to avoid is bad tabloid media. They don't want to end up on ACA because at 70 you can't make your mortgage repayments and they're going to evict you. There's no way they come out looking good in this scenario, so they're rather not set themselves up for it in the first place.

 

You are right - I am a sprightly 64 year-old man full of vigour and zest

 

Go via a broker company and get them to do the leg work. Harder for big 4 to lend you money if you don’t own a company and just a normal worker.