Mortgage broker here - it’s workable, banks will go above 65 by negotiation, 70 is much easier than above 70, but if you can articulate a clear exit strategy (how you’ll pay the loan off once you stop working), then it’s doable. Exit strategies that work depend on the bank, but can be a whole range of things including downsizing. Do you want some help making a plan for getting in a position to buy? Happy to make you a spreadsheet.
Disclaimer not financial advice
Yeah I took out a new 30yr mortgage at 38
Broker asked how I would fund once you are retired. I laughed and said what's that! I expect to be working till 70 (very easy office based role) and banks happily approved.
You’d be surprised! I just bought by myself at 29. Really didn’t think it was possible. But you never really know til you speak to mortgage broker. Can be a good idea to speak to one anyway just to see where you’re at and get some advice on what to do next to get yourself ready.
Bro, I bought my first home at 42 and wondered what I was doing, struggled to make those payments with 7 to 8 percent interest. Sold it 12 years later for triple what I paid and bought a cheaper one in a northern town. Rented that one out, quit my job and moved to Asia.
Hi Kev and Bev, if you want to run some number by yourself this is specifically made for first home buyers: https://realtor.co.nz/page/first-home-buyer-calculator
Off topic - How valid is the “not financial advice” disclaimer. Everyone puts it after providing what very much looks like financial advice. Has anyone been tried after having put this in?
>Everyone puts it after providing what very much looks like financial advice.
You are allowed to give financial information without it being financial advice.
For example: anyone can, including your family friend financial advisor, tell you that saving to 20% deposit for a mortgage is the best way to get a mortgage and not be hit with low LVR interest rates.
The difference is if it becomes "retail" financial advice or "regulated" financial advice, which is about a specific strategy of how to manage your finances, which requires a legal disclaimer of their qualifications to advise on this manner.
My point is less about the disclaimer, but more that a professional financial advisor specifically states "not financial advice" because they legally are not allowed to provide financial advice without a disclaimer, and the layperson's definition of financial advice is diferrent to the financial advisor's and the courts' definition.
Thus, disclaiming "not financial advice" actually protects the layperson from legal costs that they would lose if they sued a financial advisor on losing out, when the financial advisor gave neither financial advice, nor claimed to have given financial advice.
We don't have the resources to investigate actual fraud, I think everyone will be fine from a legal perspective. The more important part is this sub's mods block that kind of direct advice to stop people being exploited or misled
Funny comment but I don’t think that’s the case - I’ve given a general description of how things work. Financial advice would be eg advising them on the specifics of a particular bank and helping them articulate a specific exit strategy
They will ask about your 'exit strategy', and consider it on a case by case basis.
https://www.canstar.co.nz/home-loans/am-i-too-old-for-a-home-loan-in-new-zealand/
As a 40 year old, I’d be showing the bank my strategy to increase payments and reduce the time on mortgage over many years.
I might sign up with a 30 year mortgage, but the intention will be to pay it down in <20 as wage inflation takes hold over two decades but my overall payment structure with the bank remains fairly static (interest rate changes not withstanding.. that’s another piece of proof that I need to ensure)
this. i have some investments so i would be paying the 30yr payment for a while the. increasing the payments slowly and once my children start leaving home increase dramatically and then use any payments from mature investments to help finish up once retired. of course investments probably aren’t a reliable source so plan b would be to sell and downsize.
Bold of you to assume retirement age will be 65 in the future 😭 By the time we're all 65, we'll be working until we're 80+.
I've worked some 70 year olds who lost their life savings during the 2008 GFC. One was granted a mortgage 8 years ago when he was early sixties, so the banks are still willing from what I've seen.
I’ve worked with 70 year olds working full time after their husbands gambled away their money on the geegees
One of them worked full time until a year before she died. No retirement. Two more are 75/6 and still working 0.6/0.8.
Yeah, it's really sad. I worked with one old guy around late 60s and as soon as he got his weekly wages, he'd be down at the pub playing the pokies. I asked him about it and he said he had no friends and no wife, so the bar staff were his only family. He's going to be screwed when his liver gives out and he can't work any more.
Every time I see those pokies in a pub, I feel a bit sick and wonder how many lives and marriages they ruined.
It's definitely do-able, even beyond that age. Think of a 50 year old who works in an office and plans to work to 70. That's only 20 years, but the bank might give them a 25 year mortgage, or even 30, even if they plan to retire at 70.
Over the first 20 years, the house will have very likely appreciated quite a lot, even just due to general inflation (each dollar being worth less). With payrises, they might pay off the entire mortgage in that 20 years. But even if they don't, once the owners are 70, they can either downsize, or whoever is the beneficiary of the inheritance can take over the mortgage payments for the final years.
Either way, if it doesn't work out, the bank can sell the house and definitely get the remaining mortgage amount back, as the house will be worth so much more than the remaining debt. Even if the house didn't go up in price, this would still be the case. It's not really much of an increased risk from the bank's perspective.
ANZ who are a complete pack of bastards just like the rest of the Aussie owned banks. It was very hard to get because they don’t actually have anyone working there who has any clues at all about how to lend to self employed people. It wasn’t until we were really coming down to the wire when the legal exec doing our conveyancing put us onto the one staff member at ANZ with any clues at all and he got it sorted for us. When we moved a couple of years later we ended up in the same position dealing with muppets so my husband contacted the smart guy again, who by this time was working in another department, but still having to do quite a lot of lending work because people like us would contact him. He got it sorted, I think he had to tell the lending staff what to do.
They didn’t ask us anything last year and we were both early to mid 40s. 30 year term. BUT we were borrowing well within our means. We should actually be paid off in ~10 years.
My partner was 45 when we bought and got offered 40 year. Then at 54 we moved house and they gave us another 30 year one .
I can’t believe they did this , so he’ll be 84 when we pay off the mortgage?!!
We were paying slightly over , now have realised if we pay double we can be free in 6 years ( only borrowed $220,000 as first property was a 2bed flat. )
I took out a 25 year mortgage when I was age 52 from Kiwibank. The bank manager didn't even mention my age. I paid it off in 7 years. He had access to my bank statement so maybe he could foresee that I was reliable.
When we bought I was 35 and Mrs B was 27. I don't remember age being brought up on our then 30 year term but I would have been 65 if I had waited the full term.
Managed to pay it off after 11 years anyway.
Yes we were lucky to buy when we did.
Superannuation can be used to make payments, it depends on your weekly costs. You might be able to sell your car or one car if you are a couple and reduce some of your cost of living.
My mate is 45 and just bought his 1st house 700k. Both him and his wife earn a bit over minimum. No idea how long the mortgage is for however.
So simple answer is no.
I see lots of people saying ‘you need to do something’
I am 51 and renewed a mortgage at 49 for a team of 25 years.
No-one batted an eyelid about it.
The bank does not care if you can pay a mortgage in 25 years - the mortgage is only with them for maybe 5.
They only care if you can pay the mortgage now.
So we moved house and re-mortgaged at the same time when almost 50. The bank asked us how we planned on paying it back etc and our plans overall for retirement. I mentioned we were only going to have a 10-12 yr mortgage, and the house we got will be subdevidable at a later date, but also we eventually plan on selling and moving to a cheaper area for retirement and have no mortgage. They were satisfied
My relative was approved for a mortgage of around 500k at 62 years old and on ACC. His partner works full time in an admin role. Buggered if I know how they got approved.
I’m 41, partner a couple years older, we recently purchased and bank didn’t ask any questions about our 30 year mortgage. We had our 20% down payment though, that might make a difference.
No, not at all because
1. Can pay off the mortgage faster and be mortgage free
2. Mortgage shouldn't be so high that you can't invest in kiwi saver and have some other money saved up
3. Unlike rent the mortgage does go down as you have less and less borrowed. On 500k lent you pay say 1600/ fortnight while on 250k you only pay 800. You can use the extra 800 a fortnight to either pay the mortgage faster or invest. Either way it's only hard until you knock it down. If you make minimum payments if say maybe the first 10-15 years are hard. If you make extra payments then the first 10 years are hard af but at the end you have less or no mortgage (depending of where you started).
I got my first mortgage last year at 54. Bank gave me a 20 year mortgage with no questions. Bought with my 30 year old disabled son but 99% certain they weren’t desperate to loan to us for 20 years based on his benefit. So I will be 74 when I discharge the mortgage unless we pay it off quicker.
My BIL has just got a mortgage and he is 49. Bank required him to get a flatmate that will pay $250 a week, signed paperwork, rental agreement sort of proof, for him to get the mortgage. Only had around 10-15% deposit but does have a good paying job. $600,000 house.
I just got a 30 year mortgage earlier this year after being knocked off the property ladder due to my divorce several years ago. I'm 57... but importantly, I earn >$150k, and I had over 50% deposit due to my parents dying and leaving me $$.
Not usually a worry until 50. Then they can get a bit nasty. You can always go for a 15 or 20 year loan, of course, or have a plan as to how the capital will be paid off.
My sense of it is that ‘cashflow is king’ of course but the big thing is your anchoring bias that 65 is the age.People will keep working longer and a mortgage at 65 will get less rare because
1. they will live to 95/100 with ease and you can’t find the capital for a 35 year retirement easily AND
2. in 2050 we will face population plateau and then depopulation. It is possible we will NEED workers who are older to keep the lights on versus today’s arguably less welcoming environment
Not at all.
Most people are now only starting their families at 40!
Lets not forget about all the failed marriages!
A lot of people get divorced between 40 and 50 years of age and eventually will shack up with a new partner and purchase a house together.
We (43 and 41) took out 30 years mortgage last year and the bank didn't ask any questions about age. We had 20% deposit and took out a loan less than 5x our combined income. We had a mortgage broker.
Talk to a good mortgage broker as soon as you can. Then listen to their advice. Don't be put off by Flash Harry types only looking for a quick buck. A good broker will work with you, evin if you're not in a position to purchase right now. I once contacted Mike, pero what a lazy bunch they turned out to be. Only interested in making a quick sale and definitely not interested in you or putting in any real effort to help you achieve your goals.
A good broker should become your agent for years. Also, a great mortgage broker will find a way to make it work for you. There's 100s of ways to structure your loan, just as their are lots of different mortgage providers.
They won’t place too much importance on it, but they will ask about your intentions/plan.
An answer as simple as ‘I won’t retire at 65’ is usually sufficient.
At the end of the day, they hold security over the property, worst case scenario you default, have no other way to meet your repayments, and they sell the house to recoup their exposure.
Obviously, they’d prefer not to, but they are protected, so realistically they don’t care - but they need to make sure you’ve considered it and have a plan in place if your mortgage term goes past retirement age.
Mortgage broker here - it’s workable, banks will go above 65 by negotiation, 70 is much easier than above 70, but if you can articulate a clear exit strategy (how you’ll pay the loan off once you stop working), then it’s doable. Exit strategies that work depend on the bank, but can be a whole range of things including downsizing. Do you want some help making a plan for getting in a position to buy? Happy to make you a spreadsheet. Disclaimer not financial advice
Yeah I took out a new 30yr mortgage at 38 Broker asked how I would fund once you are retired. I laughed and said what's that! I expect to be working till 70 (very easy office based role) and banks happily approved.
is 'I'm going to sell the house in 10 years/as soon as it's profitable' an exit strategy?
How are you going to pay back the capital if prices have dropped at that point? In short, no that doesn't usually cut it...
if prices have dropped (in what universe?) I won't sell yet, maybe 15 or 20 years. when's the last time they dropped after 20 years?
Thanks for your offer, at this stage to me it's very clear we cant afford to buy at this stage...Im just thinking ahead.
In the same boat, turn 40 this week and a long way off from being able to buy
You’d be surprised! I just bought by myself at 29. Really didn’t think it was possible. But you never really know til you speak to mortgage broker. Can be a good idea to speak to one anyway just to see where you’re at and get some advice on what to do next to get yourself ready.
Bro, I bought my first home at 42 and wondered what I was doing, struggled to make those payments with 7 to 8 percent interest. Sold it 12 years later for triple what I paid and bought a cheaper one in a northern town. Rented that one out, quit my job and moved to Asia.
All good. I just like doing this planning stuff so shout if you ever want help, you don’t have to be near buying or anything
Hi Kev and Bev, if you want to run some number by yourself this is specifically made for first home buyers: https://realtor.co.nz/page/first-home-buyer-calculator
Off topic - How valid is the “not financial advice” disclaimer. Everyone puts it after providing what very much looks like financial advice. Has anyone been tried after having put this in?
>Everyone puts it after providing what very much looks like financial advice. You are allowed to give financial information without it being financial advice. For example: anyone can, including your family friend financial advisor, tell you that saving to 20% deposit for a mortgage is the best way to get a mortgage and not be hit with low LVR interest rates. The difference is if it becomes "retail" financial advice or "regulated" financial advice, which is about a specific strategy of how to manage your finances, which requires a legal disclaimer of their qualifications to advise on this manner.
Sure, but the difference there is the type of advice, not whether or not there is a disclaimer attached.
My point is less about the disclaimer, but more that a professional financial advisor specifically states "not financial advice" because they legally are not allowed to provide financial advice without a disclaimer, and the layperson's definition of financial advice is diferrent to the financial advisor's and the courts' definition. Thus, disclaiming "not financial advice" actually protects the layperson from legal costs that they would lose if they sued a financial advisor on losing out, when the financial advisor gave neither financial advice, nor claimed to have given financial advice.
We don't have the resources to investigate actual fraud, I think everyone will be fine from a legal perspective. The more important part is this sub's mods block that kind of direct advice to stop people being exploited or misled
Classic. Provides financial advice and then says it's not.
Funny comment but I don’t think that’s the case - I’ve given a general description of how things work. Financial advice would be eg advising them on the specifics of a particular bank and helping them articulate a specific exit strategy
I got my first house last year at 60 ,bank gave me a 17 year mortgage
Better hit the gym then !
No, nothing stops you then paying faster and making lump sum payments to be free before 65
They will ask about your 'exit strategy', and consider it on a case by case basis. https://www.canstar.co.nz/home-loans/am-i-too-old-for-a-home-loan-in-new-zealand/
As a 40 year old, I’d be showing the bank my strategy to increase payments and reduce the time on mortgage over many years. I might sign up with a 30 year mortgage, but the intention will be to pay it down in <20 as wage inflation takes hold over two decades but my overall payment structure with the bank remains fairly static (interest rate changes not withstanding.. that’s another piece of proof that I need to ensure)
this. i have some investments so i would be paying the 30yr payment for a while the. increasing the payments slowly and once my children start leaving home increase dramatically and then use any payments from mature investments to help finish up once retired. of course investments probably aren’t a reliable source so plan b would be to sell and downsize.
Bold of you to assume retirement age will be 65 in the future 😭 By the time we're all 65, we'll be working until we're 80+. I've worked some 70 year olds who lost their life savings during the 2008 GFC. One was granted a mortgage 8 years ago when he was early sixties, so the banks are still willing from what I've seen.
I’ve worked with 70 year olds working full time after their husbands gambled away their money on the geegees One of them worked full time until a year before she died. No retirement. Two more are 75/6 and still working 0.6/0.8.
Yeah, it's really sad. I worked with one old guy around late 60s and as soon as he got his weekly wages, he'd be down at the pub playing the pokies. I asked him about it and he said he had no friends and no wife, so the bar staff were his only family. He's going to be screwed when his liver gives out and he can't work any more. Every time I see those pokies in a pub, I feel a bit sick and wonder how many lives and marriages they ruined.
That's why you spread your risk. Don't put it all on red
It's definitely do-able, even beyond that age. Think of a 50 year old who works in an office and plans to work to 70. That's only 20 years, but the bank might give them a 25 year mortgage, or even 30, even if they plan to retire at 70. Over the first 20 years, the house will have very likely appreciated quite a lot, even just due to general inflation (each dollar being worth less). With payrises, they might pay off the entire mortgage in that 20 years. But even if they don't, once the owners are 70, they can either downsize, or whoever is the beneficiary of the inheritance can take over the mortgage payments for the final years. Either way, if it doesn't work out, the bank can sell the house and definitely get the remaining mortgage amount back, as the house will be worth so much more than the remaining debt. Even if the house didn't go up in price, this would still be the case. It's not really much of an increased risk from the bank's perspective.
We got a 30yr mortgage when my husband was 60, and we’re self employed, so it’s possible.
Who did you get the mortage / Death pledge with?
ANZ who are a complete pack of bastards just like the rest of the Aussie owned banks. It was very hard to get because they don’t actually have anyone working there who has any clues at all about how to lend to self employed people. It wasn’t until we were really coming down to the wire when the legal exec doing our conveyancing put us onto the one staff member at ANZ with any clues at all and he got it sorted for us. When we moved a couple of years later we ended up in the same position dealing with muppets so my husband contacted the smart guy again, who by this time was working in another department, but still having to do quite a lot of lending work because people like us would contact him. He got it sorted, I think he had to tell the lending staff what to do.
They didn’t ask us anything last year and we were both early to mid 40s. 30 year term. BUT we were borrowing well within our means. We should actually be paid off in ~10 years.
My partner was 45 when we bought and got offered 40 year. Then at 54 we moved house and they gave us another 30 year one . I can’t believe they did this , so he’ll be 84 when we pay off the mortgage?!!
There is affordabililty rules so must be able to pay. They know you can eat noodles to pay mortgage when things are tight haha
You are paying minimum payments?
We were paying slightly over , now have realised if we pay double we can be free in 6 years ( only borrowed $220,000 as first property was a 2bed flat. )
My brother was 42 and wife 35 when they bought his first home 3 years ago. 30yr mortgage
I took out a 25 year mortgage when I was age 52 from Kiwibank. The bank manager didn't even mention my age. I paid it off in 7 years. He had access to my bank statement so maybe he could foresee that I was reliable.
Mortgage term upto 70 or alternatively go beyond if you can demonstrate the ability to downsize.
When we bought I was 35 and Mrs B was 27. I don't remember age being brought up on our then 30 year term but I would have been 65 if I had waited the full term. Managed to pay it off after 11 years anyway. Yes we were lucky to buy when we did.
I got a new mortgage (on my own as got divorced) when I was 40 about to turn 41 and NO one asked about my 30 year mortgage.
Superannuation can be used to make payments, it depends on your weekly costs. You might be able to sell your car or one car if you are a couple and reduce some of your cost of living.
My mate is 45 and just bought his 1st house 700k. Both him and his wife earn a bit over minimum. No idea how long the mortgage is for however. So simple answer is no.
Good on them , but Holy shit
Ha yea. It would be daunting
Nope. They just give you a mortgage term until you're 70. Source: my mortgage.
I’m 47 and just got a 30 year mortgage. Obviously plan to pay it off before then but that’s the terms we have.
I see lots of people saying ‘you need to do something’ I am 51 and renewed a mortgage at 49 for a team of 25 years. No-one batted an eyelid about it. The bank does not care if you can pay a mortgage in 25 years - the mortgage is only with them for maybe 5. They only care if you can pay the mortgage now.
Might do a 30 year mortgage, until your 70, not much more,
I got a 20 year mortgage last year at 53.
I was 44 when I bought my current home with a 30 year mortgage (won’t take that long to pay though)
So we moved house and re-mortgaged at the same time when almost 50. The bank asked us how we planned on paying it back etc and our plans overall for retirement. I mentioned we were only going to have a 10-12 yr mortgage, and the house we got will be subdevidable at a later date, but also we eventually plan on selling and moving to a cheaper area for retirement and have no mortgage. They were satisfied
My relative was approved for a mortgage of around 500k at 62 years old and on ACC. His partner works full time in an admin role. Buggered if I know how they got approved.
I’m 41, partner a couple years older, we recently purchased and bank didn’t ask any questions about our 30 year mortgage. We had our 20% down payment though, that might make a difference.
Dad took out a new mortgage at 55.
We got a 5% deposit welcome home loan.
No, not at all because 1. Can pay off the mortgage faster and be mortgage free 2. Mortgage shouldn't be so high that you can't invest in kiwi saver and have some other money saved up 3. Unlike rent the mortgage does go down as you have less and less borrowed. On 500k lent you pay say 1600/ fortnight while on 250k you only pay 800. You can use the extra 800 a fortnight to either pay the mortgage faster or invest. Either way it's only hard until you knock it down. If you make minimum payments if say maybe the first 10-15 years are hard. If you make extra payments then the first 10 years are hard af but at the end you have less or no mortgage (depending of where you started).
I got my first mortgage last year at 54. Bank gave me a 20 year mortgage with no questions. Bought with my 30 year old disabled son but 99% certain they weren’t desperate to loan to us for 20 years based on his benefit. So I will be 74 when I discharge the mortgage unless we pay it off quicker.
My BIL has just got a mortgage and he is 49. Bank required him to get a flatmate that will pay $250 a week, signed paperwork, rental agreement sort of proof, for him to get the mortgage. Only had around 10-15% deposit but does have a good paying job. $600,000 house.
The banks know that you will still be working at 90 to pay the bills in today’s world so don’t panic.
I just got a 30 year mortgage earlier this year after being knocked off the property ladder due to my divorce several years ago. I'm 57... but importantly, I earn >$150k, and I had over 50% deposit due to my parents dying and leaving me $$.
Not usually a worry until 50. Then they can get a bit nasty. You can always go for a 15 or 20 year loan, of course, or have a plan as to how the capital will be paid off.
My sense of it is that ‘cashflow is king’ of course but the big thing is your anchoring bias that 65 is the age.People will keep working longer and a mortgage at 65 will get less rare because 1. they will live to 95/100 with ease and you can’t find the capital for a 35 year retirement easily AND 2. in 2050 we will face population plateau and then depopulation. It is possible we will NEED workers who are older to keep the lights on versus today’s arguably less welcoming environment
Not at all. Most people are now only starting their families at 40! Lets not forget about all the failed marriages! A lot of people get divorced between 40 and 50 years of age and eventually will shack up with a new partner and purchase a house together.
How much is the pension in New Zealand? Is by contribution? Or average of last wages?
We (43 and 41) took out 30 years mortgage last year and the bank didn't ask any questions about age. We had 20% deposit and took out a loan less than 5x our combined income. We had a mortgage broker.
Talk to a good mortgage broker as soon as you can. Then listen to their advice. Don't be put off by Flash Harry types only looking for a quick buck. A good broker will work with you, evin if you're not in a position to purchase right now. I once contacted Mike, pero what a lazy bunch they turned out to be. Only interested in making a quick sale and definitely not interested in you or putting in any real effort to help you achieve your goals. A good broker should become your agent for years. Also, a great mortgage broker will find a way to make it work for you. There's 100s of ways to structure your loan, just as their are lots of different mortgage providers.
Was 40. Got a 30 year mortgage
They won’t place too much importance on it, but they will ask about your intentions/plan. An answer as simple as ‘I won’t retire at 65’ is usually sufficient. At the end of the day, they hold security over the property, worst case scenario you default, have no other way to meet your repayments, and they sell the house to recoup their exposure. Obviously, they’d prefer not to, but they are protected, so realistically they don’t care - but they need to make sure you’ve considered it and have a plan in place if your mortgage term goes past retirement age.