Loan Tip: Discrimination against borrowers over 45 years of age?

Many lenders restrict lending where the borrower will be more than 75 years of age during the loan term. Since most property loan terms are 30 years this would mean anyone over the age of 45 may face questions as to how they will continue paying the loan after they reach 75 years of age.

Is this discrimination?

Yes, it is as they are treating people differently based on age.

Can you complain about it? You can complain all you like, but it is likely to be a valid point of discrimination because it is a valid question. It is not so common for a person to work beyond 75. The pension kicks in at age 67 now. If a borrower is going to stop working it may be irresponsible for a lender to lend them money – how will they pay it back? That is what a lender will be concerned with.

This doesn’t mean an elderly 46 year old can’t get a loan though, but it does mean the older they get the more scrutiny they will encounter.

So, when applying for a loan with the loan term ending after the age of 75, the borrow will likely need to provide an exit strategy to the lenders.

 

Well that's just great news for someone turning 48 tomorrow.

 

Property doubles every 7-10 years so the bank will get their money back if the borrower can't pay at 65

 

This is really only an issue for someone buying their first house. If you already own your home lenders will accept selling an IP as an exit strategy.

Super, downsizing an many other exit strategies can also be applied were suitable. It's really not a big deal.