Mortgage Exit Strategy

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Retirement Age Borrowing Power Calculator
Does your exit strategy stack up?
What is a mortgage exit strategy?
What's considered a good mortgage exit strategy?
What’s considered a bad exit strategy?
Downsizing as an exit strategy
Exit strategy refund loan templates
Mortgage exit strategy FAQs
Golden tips for mature borrower
Who can help me prepare a mortgage exit strategy?

Retirement Age Borrowing Power Calculator

Enter your details below and discover whether your exit strategy for a home loan will be acceptable to the bank.

From Coming Soon

Does your exit strategy stack up?

If you’re close to retirement age, lenders typically require you to provide an exit strategy for how you plan to pay off your home loan.

The bank may knock back your home loan exit strategy if your plan is deemed high risk or unrealistic, or doesn’t otherwise meet te lender’s policy.

The solution:

Your exit strategy will depend on your asset position, income and retirement plans.

We can help you choose a lender that will take a common sense approach to your situation and future plans.

Speak with one of our mortgage brokers by calling us on 000 xxxx xxxxx or by completing our free online application form.

What is a mortgage exit strategy?

An exit strategy is effectively a backup mortgage repayment plan.

Technically, all home loans have an exit strategy. It’s paying off the mortgage over 30 years. Lenders require you to provide an exit strategy only when the standard one doesn’t work.

For example, many wharves in Sydney have luxury leasehold units in them. Since they’re over water, they have a 99-year leasehold title instead of a freehold torrens title.

The lease may have only 20 years remaining at the time you buy it. In this case, lenders won’t accept a 30 year loan term. In most cases, the exit strategy is to shorten the loan term to be 5 years shorter than the remaining lease term.

Development loans generally also require exit strategies. A property developer may not afford to keep all of the units when the building is complete. So, the bank accepts an exit strategy of selling some or all of the units.

What's considered a good mortgage exit strategy?

Generally, the following are usually not acceptable as an exit strategy for mature borrowers:

Inheritance;
Projected income or superannuation balances;
An anticipated Workers Compensation payout;
An anticipated Family Law settlement;
An anticipated employers bonus payment or wage increase;
A sale of a business.

However, there’s a lot of grey areas here. We’ve seen lenders make exceptions and approve people with exit strategies similar to these where we could provide evidence and their strategy made sense.

Downsizing as an exit strategy

Downsizing to a smaller house when you reach the age of retirement is accepted by a few lenders as an exit strategy, however, not all do.

Many of our customers have successfully used downsizing in combination with their super balance or investments to make it a solid plan.

When using this strategy, you’ll need to provide details such as:

Please note that in cases, where you already live in a two-bedroom unit or smaller, it’s difficult to convince lenders that downsizing is a viable option.

Exit strategy refund loan templates

Here are a couple of exit strategy home loan templates that demonstrate how downsizing can be utilised as an exit strategy. Both home loan exit strategy letter examples were approved by the lenders.

Mortgage exit strategy FAQs

Do investment properties need exit strategies?

You actually don’t need an exit strategy on an investment property. This is because you can sell it anytime without financial hardship.

Under the National Consumer Credit Protection (NCCP) act, you’re considered to be in financial hardship only if you can’t pay off a mortgage without selling your home.

However, some lenders don’t approve mortgages for investment properties unless you provide an acceptable exit strategy.

You can speak with a mortgage broker like us if your lender asks for an exit strategy for your investment loan. We’ll help you find a new lender.

What if I own a business?

If you’re a business owner, you may still be earning an income past the normal retirement age. This typically depends on whether or not:

You’re required to do manual labour.
You have a succession plan for management.
It’s reasonable to assume that the business can continue to operate without you.
The guarantee doesn’t have to be permanent.
Helps you improve your credit history.

We can present a case to some of our lenders to show that you can continue to make your mortgage repayments past the normal retirement age.

What documents do I need to provide with an exit strategy?

Depending on what exit strategies you use, you’ll have to provide different documents but generally you’ll need:

Superfund statement
Superannuation calculator to work out how much super you’ll have when you retire.
Amortization calculator
Letter from a financial planner
Evidence of investment properties held
Share portfolio statement

Golden tips for mature borrower

Professionally qualified and experienced mortgage brokers can help you prepare an acceptable exit strategy.

Our mortgage brokers know and understand the policies of the major lenders. They are credit specialists that know which banks have more lenient lending guidelines.

You can call us on 000 xxxx xxxxx or complete our free online assessment form and one of us will contact you to discuss your situation and loan needs.

Who can help me prepare a mortgage exit strategy?

Professionally qualified and experienced mortgage brokers can help you prepare an acceptable exit strategy.

Our mortgage brokers know and understand the policies of the major lenders. They are credit specialists that know which banks have more lenient lending guidelines.

You can call us on 000 xxxx xxxxx or complete our free online assessment form and one of us will contact you to discuss your situation and loan needs.

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