‘Denied’: Australian woman sparks internet furore over mortgage knock-back

An Aussie woman with a respectable job has sparked fury over claims she was knocked back by mortgage lenders for one controversial reason.

An Aussie woman claims she was knocked back by mortgage brokers after attempting to secure a home – because “she was too old”.

The single 43-year-old told news.com.au she had saved up $60k since 2018 when she first moved to Melbourne, but had been rejected by one broker and told by another that she could only be pre-approved for a $200k home.

“I knew it would be hard at this age but I didn’t think it would be impossible,” she said.

“I have a few friends in the same situation that are now worried … I’m definitely not alone.”

The woman originally posted her story to Reddit, where a number of sceptics and mortgage brokers said there might be more to her story.

An Australian woman (stock image above) has claimed she was knocked back by lenders because she was “too old” to service the loan. Picture: iStock

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In a post titled: “Home loan denied, happy new year to me”, the Melburnian took to the social media forum to express her dissatisfication.

“It finally happened. At 43 I’m too old to service a loan. Earn $110k, no debt, no dependants, saved $60k,” she said.

“Denied as I won’t be able to service a 30 year loan. Might as well get unhealthy so I can at least die before I become homeless. Who wants a drink?”

She said she had “excellent credit” with $120,000 in super and was hoping to secure a loan for up to half a million dollars.

Despite claiming to be debt free, the woman later revealed she held a 26-year-old student loan - which she described as “illegal” and “the subject of an inquiry”.

She said the debt incurred under the voluntary Student Finanical Supplement Scheme, which was scrapped in 2004, and had been indexed at 7 per cent per annum for the last 19 years.

The Australian government’s Social Security Guide states the loan is indexed according to CPI and there is no current inquiry into the scheme.

One major law firm says it is investigating the scheme as a potential class action suit.

Other older Australians in similar situations detailed their own experiences under her post.

One claimed that aged 51, on $300k a year, the big four banks wouldn’t lend him anything.

“The reason they gave was that I was employed by a USA tech firm that could terminate my employment with zero notice,” he said.

Another commented, “So 43 is too old to service a loan but due to inflation and the current housing market, the average Aussie isn’t able to afford a home until they’re in their 40s.”

“The good old catch 22,” the user said.

House prices and interest rates remain stubbornly high and older Australians are increasingly retiring with a mortgage. Picture: NewsWire / Flavio Brancaleone

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The woman’s plight also garnered huge attention on X, with former One Nation staffer and founder of Migration Watch, Jordan Knight sharing it to his thousands of followers.

“One of the most depressing posts I’ve ever seen. The architects of Australia’s housing crisis should be jailed,” he said.

With both house prices and interest rates remaining stubbornly high, research by Housing For the Aged Action Group showed the percentage of older people who own their own homes outright by 55 has severely declined.

“While the majority of older people will retire as homeowners, the last two decades have seen growing signs of housing insecurity,” the researchers found.

It seems for those who have put off home ownership or are attempting to re-enter the market, getting a mortgage approved may be more challenging than it seems.

But respondents online and several mortgage brokers suggest it may be less to do with the woman’s age, and more to do with her financial position.

Mortgage Choice broker James Algar said “Nearly every single bank, including all the big majors do require brokers to provide an acceptable exit strategy as age moves beyond usual retirement age.” Picture David Gray / AFP

Mortgage Choice broker James Algar said without government buyer’s schemes, often applicants with relatively small deposits have a hard time getting approved.

“As a first homebuyer you can get away with mustering up a 5-10 per cent deposit, but for somebody who is going to cop the full stamp duty cost with a $60k deposit, she’s as high risk a transaction that you’re going to find in the market,” he said.

“There would be very few lenders in the market who would be willing to approve a loan for this person.”

Social media sleuths were also quick to point out that mortgages are often written for applicants much older than 43, so the decision to knock back the woman in question would likely be related to something else.

“I’m a lender and this sounds ridiculous to me. I’ve written 30 year loans for people over 60 on many occasions. The key is an appropriate exit strategy,” one Reddit user said.

Mr Algar said: “Nearly every single bank, including all the big majors do require brokers to provide an acceptable exit strategy as age moves beyond usual retirement age.

“However the reality is this exit strategy is not important till after 55,” he said.

Director of CBM mortgages, in Sydney’s eastern suburbs, Craig McDonald also pointed to the 3% buffer banks use to assess whether you qualify for the loan.

“Banks generally add on a three per cent buffer onto the interest rate, although your interest rate may be 6.4 they may assess at 9.4,” he said.

“Banks also tend to have minimum living expenses they use to assess your application based on marital status, postcode et cetera.”

The woman said: “I’ll probably buy a timeshare overseas and see if I can go back to my previous career to work remotely.”

“Or buy student accommodation for the $250k I can afford and hope to God they don’t trash it,” she said.

Originally published as ‘Denied’: Australian woman sparks internet furore over mortgage knock-back