Australians are being given home loans in their 70s

Banks are handing out home loans to older customers that will leave them making repayments when they are over 100.

Exclusive: Banks are handing out home loans to customers in their 70s that will leave them making repayments when they are over 100.

The regulators have forced financial institutions to crackdown on lending including dishing out interest-only and investor loans.

This has made it much tougher for borrowers to successfully get credit.

But data revealed to News Corp shows some concerning cases of banks giving borrowers credit — many of whom are likely to be nearing retirement.

Some of the worst cases in 2018 of banks handing out mortgages included:

— A 79-year-old borrower was given a $210,000 home loan for 25 years. They would not

pay off the loan until they were 104 if they made the minimum repayments.

— A 76-year-old and 77-year-old couple was given a $250,000 30-year interest-only loan.

— A 72-year-old and 73-year-old couple was given a $1.46 million investment principal and interest loan.

It comes after reports Treasurer Josh Frydenberg called on the banks to reignite “affordable and timely” lending after figures showed the nation’s house prices endured their worst year in 2018 since the Global Financial Crisis.

Prices fell in the biggest markets — Sydney by 8.9 per cent and Melbourne by 7 per cent.

Older Australians have still been able to successfully get a home loan despite a crackdown on lending practices.

Aussie Home Loans’ chief executive officer James Symond said it can be problematic when older Australians are given home loans, but sometimes they take out loans to help young relatives get a foot on the property ladder.

“Every customer’s circumstances are different and need to be taken into account,” he said.

“Many older Australians are stepping up to the plate to help their children or grandchildren get into the property market.

“In a wide range of circumstances older Australians are taking on the loan themselves or acting as guarantors for loans, backed by their assets built up over decades.”

Last year the financial services Royal Commission put the spotlight on the banks for loose lending standards.

And to save on costs, financial institutions have been widely using a controversial benchmark known as the Household ­Expenditure Measure (HEM) to ­approve loans.

Under the system, banks assess mortgage applications based on broad demographic information — such as typical incomes in the suburb of the property being purchased — rather than assessing each ­borrower’s specific financial circumstances.

Mortgage broking site Hero Broker’s founder Clint Howen said it remained “a lot riskier” to give older Australians a mortgage.

“I get a few older Australians trying to take out home loans and many get upset and feel discriminated against for not being able to show they can service the loan,” he said.

“It’s a really tricky situation and unless it works out you should steer clear of it.”

He also said he often sees couples in their mid to late 60s trying to take out a “big loan at the end of their career.”

Banking sources confirmed some older Australians could only get loans if they could show they had “an exit strategy.”

But this must not involve jeopardising their principal place of residence.

@sophieelsworth