Home Loans for Pensioners: Is It Possible and How?

Brisbane’s property market is buzzing, and many pensioners are keen to join in, whether it’s downsizing, finding a comfortable home, or even investing to boost their retirement income. To achieve this goal, the right financing solution, like  home loans for pensioners, is crucial.

With rising living costs and an increasing number of retirees seeking to own property, lenders are now scrutinising age, income, and financial position more closely. Banks want to see a steady income stream, yet many pensioners rely on the age pension, disability support pension, or rental income.

If you’re a pensioner who finds all this overwhelming, you’re not alone. This blog covers everything you need to know about home loans for pensioners in Brisbane, with real facts and insights from experienced mortgage brokers. No jargon, just plain and simple language. 

Let’s get into it!

If you’re a pensioner looking for a reliable home loan solution, our Brisbane mortgage brokers at Kelly Brothers Finance can help. Call us on (07) 3847 9450 or visitkellybrothersfinance.com.au today.

Can Pensioners Get a Home Loan? 

Yes, pensioners can get a home loan! Home loans for pensioners are designed to help older Australians, including those on the Age Pension or Disability Support Pension, buy or refinance a home. 

Unlike traditional home loans, these loans take into account the specific circumstances of retirees. 

In Brisbane, lenders often recognise these needs and tailor their criteria to suit pensioners. They typically come with shorter loan terms and stricter income assessments, as many pensioners rely on government pensions or rental income rather than full-time work.

Eligibility Criteria for Home Loans for Pensioners

Brisbane’s property market has a lot to offer retirees, but not every pensioner qualifies for a home loan. Understanding the eligibility criteria is crucial if you’re looking to buy a home or investment property.

Let’s break down the key requirements for home loans for pensioners in Brisbane and how you can prepare for your application.

1. Age: Most lenders have no strict maximum age, but older pensioners may be offered shorter loan terms to ensure the loan is paid off within their expected retirement income years.
2. Income: Your main income source, like the age pension, disability support pension, or rental income, needs to be stable and regular. Lenders will assess whether this income can cover monthly repayments.
3. Deposit or Equity: Typically, you’ll need a minimum deposit of at least 10–20% of the property price. If you’re refinancing, having equity in your current property can help secure approval.
4. Credit History: A good credit score and a clean credit file will strengthen your application.
5. Brisbane Property Factors: Lenders in Brisbane may have specific criteria for certain property types, like older apartments or high-density buildings.
6. Lending Policies: Local lenders and Queensland-based policies, including stamp duty concessions, can also impact eligibility. Some lenders in Brisbane offer more flexible options tailored for retirees compared to traditional lenders.
7. Additional Requirements: You’ll also need to provide the contract of sale, proof of identity documents, and financial statements (including Notices of Assessment from the last two years).

If you’re unsure, working with an experienced mortgage broker in Brisbane, such as the team at   Kelly Brothers Finance, can help you understand these criteria and find the best loan for your retirement plans.

How Much Can Pensioners Borrow for a Home Loan?

How much pensioners can borrow for a home loan depends largely on their income and financial situation. Most banks in Queensland generally lend around 30–40% of a pensioner’s disposable income, using shorter loan terms to make repayments more manageable during retirement.

To give you a clearer picture, here’s a sample breakdown:

• Let’s say you receive an age pension of about $2,000 per month (or around $500 per week).
  
  
• After deducting essential living expenses (often around $1,200/month), your disposable income would be around $800/month.
  
  
• Banks typically assess whether 30–40% of that figure can be used for fortnightly loan payments.
  
  
• This might translate to a borrowing capacity of around $180,000–$220,000, depending on the loan term and other factors.

Of course, these are just ballpark figures. The exact loan amount also depends on your credit score, the size of your deposit, and any other regular income streams like rental income or superannuation.

Best Home Loan Options for Pensioners with Broker Support

Finding the best home loan for pensioners can be a challenging task. Working with an experienced broker can make it easier by connecting you to loan options that suit your retirement income and personal circumstances.

Standard Home Loans (Fixed or Variable Rate)

Standard home loans are the most common and are offered with either a fixed interest rate or variable interest rate, depending on your needs. Pensioners often face stricter income checks and shorter loan terms to make repayments more manageable in retirement. 

A fixed-rate home loan locks in the interest rate for a set period, giving you predictable repayments and helping you plan your finances with certainty. Meanwhile, a variable-rate home loan allows the interest rate to change with the market, offering flexibility and the potential to save money if rates drop over time.

Reverse Mortgage Loans

A reverse mortgage allows pensioners to access equity in their homes without needing to make regular repayments. The loan is paid back, with interest, when the property is sold.

Equity Release Loans (Line of Credit)

This type of loan uses your home’s equity as security, letting you draw funds as needed. You only pay interest on what you use, with the flexibility to repay over time.

Home Equity Access Scheme

The Home Equity Access Scheme is a government-backed loan for pensioners, offering a steady cash flow in retirement. It’s a good option for those needing a small, low-cost loan against their home.

Next, let's dive into the process of how you can get started with a pensioner’s home loan application.

Steps to Apply for a Home Loan as a Pensioner

Applying for a home loan as a pensioner in Brisbane doesn’t have to be daunting. Here’s a simple step-by-step guide to help you through it.

1️. Get Professional Financial Advice and Work with a Mortgage Broker

Start by speaking with a financial advisor who understands the challenges pensioners face and can help you decide what you can afford. At the same time, an experienced mortgage broker such as Kelly Brothers Finance will review your personal circumstances and compare lenders to find the best loan product for you.

They’ll also explain important terms like the comparison rate and how it affects your repayments.

2. Research and Choose the Right Loan Product

Look at different options, including standard home loans, equity loans, and even reverse mortgages. Make sure you understand the loan product’s features, fees, and comparison rate before you decide. 

Your broker can also assist you in selecting the right loan product best for your situation.

3. Gather Your Documents for the Loan Application

You’ll need to provide proof of identity, income sources (like the age pension or rental income), and details about any existing debts. The loan application will also require details of your real estate goals and financial position.

4. Consider Pre-Approval

Applying for pre-approval helps you know your borrowing limit and boosts your confidence when house hunting. It can also speed up the process when you find a property you love.

5. Factor in Lenders Mortgage Insurance (LMI)

If your deposit is less than 20%, you might need to pay Lenders Mortgage Insurance. This extra cost protects the lender, not you, so consider how it affects your loan balance and repayments.

6. Seek Legal Advice

Before signing anything, get legal advice to make sure you fully understand the loan agreement. A lawyer can review the contract of sale and explain any legal issues that could affect your real estate plans.

7. Pay Application Fee and Finalise Your Loan

Be ready for upfront costs like the application fee, settlement fees, and any valuation charges. Once your loan is approved and all conditions are met, you’re on your way to homeownership.

Let Kelly Brothers Finance Guide You

At Kelly Brothers Finance, our experienced Brisbane mortgage brokers understand the unique challenges pensioners face. We’ll help you explore the best home loan options for your retirement and guide you through every step of the homebuying process for a smooth experience. Call us on (07) 3847 9450 or visitkellybrothersfinance.com.au to get started.

Frequently Asked Questions (FAQs)

As a pensioner, do I need an exit strategy for a home loan?

Yes, most lenders require pensioner home loans to have a clear exit strategy, especially for older loan applicants. This shows how you’ll pay off the loan balance within a certain time period and ensures you’ll have a comfortable retirement.

Which loan is best for pensioners?

For pensioners, choosing the best loan depends on your financial circumstances and future needs. Fixed-rate home loans, reverse mortgages, or even an investment loan might work, depending on your source of income, property type, and whether you want the lowest interest rate possible.

What are the new mortgage rules for older borrowers?

The rules for pensioner home loans now include tighter lending criteria and shorter loan terms to suit the borrower’s retirement age. Lenders also consider your source of income, existing debts like credit cards or personal loans, and the median house price in your area to assess loan repayments.

Can you get a home loan with the Centrelink pension?

Yes, some pensioners use the aged pension or disability support pension as a source of income for loan approvals. As long as you can cover loan repayments and meet other lending criteria, you can get a secured loan on a separate property. You could also invest in a residential property, depending on your house deposit and financial circumstances.

Wrapping Up

Home loans for pensioners in Brisbane are definitely possible in 2025, and there are more options out there than you might think. With the right advice and support from a friendly team of mortgage brokers, you can find a loan that fits your retirement plans and live out your golden years in your dream home.

At Kelly Brothers Finance, we’re based in North Brisbane and proudly serve the greater Brisbane region. Our friendly brokers can assist with paperwork, compare loans across a wide range of lenders, and ensure your application proceeds smoothly from start to finish. 

If you’re ready to explore your loan options or just want to chat about what’s possible, we’d love to offer you a free consultation. Give us a call at (07) 3847 9450 or visitkellybrothersfinance.com.au. We’re here to help pensioners make their homeownership goals a reality.