Top tips to secure a retirement home loan in Bardon

Purchasing a retirement home requires different loan structures to standard owner-occupied mortgages.

Lenders assess retirement home loan applications based on your ability to service the loan beyond working age, which means superannuation, pension income, and investment returns become central to your application. If you are transitioning out of full-time work or already retired, the way lenders calculate serviceability changes, and not all lenders offer the same flexibility.

How lenders assess retirement income

Lenders treat retirement income differently to salary income. Superannuation drawdowns, the Age Pension, rental income, and investment dividends can all support a home loan application, but each lender applies its own policy on what counts and how much weight it carries. Some lenders will accept up to 80 per cent of rental income, while others apply a lower percentage or exclude it entirely if the property is being sold as part of your move. The Age Pension is generally accepted, though lenders may discount it slightly depending on the loan term you are applying for.

Consider a buyer in their late 60s selling an investment property in inner Brisbane and purchasing a home in Bardon to be closer to family. They have $400,000 in superannuation and receive part Age Pension. One lender may count 100 per cent of their pension and superannuation drawdown as income, while another lender may only accept the pension at 80 per cent and exclude the super drawdown past a certain age. The difference in policy can reduce borrowing capacity by $100,000 or more, which directly affects the type of home they can purchase in a suburb where properties regularly exceed $1,000,000.

Loan term and exit strategy

Retirement home loans often come with shorter loan terms, and lenders want to see a clear exit strategy. A 30-year loan term is uncommon for borrowers over 60. Instead, lenders may offer 10 to 15 years, or require you to demonstrate how the loan will be repaid, whether through the sale of another asset, an inheritance, or ongoing income.

Some lenders offer interest-only loan structures, which keep repayments lower during retirement and allow you to use your cash flow for living expenses. The loan balance remains unchanged, and the property is typically sold to repay the loan when you downsize further or move into aged care. This structure works when you have sufficient equity and a property in a suburb like Bardon, which has a strong track record of capital growth due to its proximity to the CBD, quality schools, and established streetscapes.

Superannuation as a deposit source

You can access superannuation from age 60 if you have retired, or from your preservation age if you meet a condition of release. Many buyers use a lump sum withdrawal to fund part or all of their deposit, which reduces the amount they need to borrow and improves serviceability. If you are purchasing a home in Bardon at the suburb's current median, a deposit of 20 per cent avoids Lenders Mortgage Insurance and gives you access to a wider panel of lenders.

Superannuation used as a deposit does not count as income, so you still need to demonstrate ongoing income to service the loan. If your superannuation balance is large enough, some lenders may allow you to structure the loan with a combination of capital drawdown and pension income, though this varies by lender and depends on your age and the loan term.

Downsizing contributions and tax benefits

If you are over 55 and selling a home you have owned for at least 10 years, you may be eligible to make a downsizer contribution to your superannuation of up to $300,000 per person. This does not count toward your contribution caps and can be made even if your super balance is above the transfer balance cap. The contribution can then be drawn down to fund your new home purchase or retained within super to provide a larger pool of retirement income.

This is relevant when purchasing a retirement home because it allows you to move equity from your previous home into a tax-effective structure without losing access to the funds. For buyers moving to Bardon from outer suburbs or regional areas, the downsizer contribution can offset the price difference between the sale property and the new property, reducing the loan amount required.

Bardon as a retirement location

Bardon sits four kilometres from the Brisbane CBD and is known for its elevated position, leafy streets, and proximity to Rainworth and Bardon State Schools, as well as Bardon Park and the adjacent Mount Coot-tha Reserve. The suburb attracts downsizers and retirees who want a quieter, established area with access to walking tracks, local cafes, and public transport, without moving far from the inner city.

The median age in Bardon is higher than the Brisbane average, and the suburb has a strong proportion of older owner-occupiers. Properties here are typically Queenslanders, post-war homes, and more recent townhouse developments, with a mix of renovated character homes and vacant land for new builds. The market is tightly held, and properties in good condition are often purchased by buyers who intend to stay long-term, which supports price stability.

Loan structures that suit retirement buyers

Most lenders offer variable rate, fixed rate, and split rate options for retirement home purchases. A variable rate loan provides flexibility to make additional repayments or pay out the loan early without break costs. A fixed rate loan locks in your repayment amount, which can help with budgeting on a fixed income, though you lose flexibility and may face significant costs if you need to exit the loan early.

A split rate structure allows you to fix part of the loan and keep part variable. This gives you some certainty over repayments while retaining the ability to make extra repayments on the variable portion. Some lenders also offer a linked offset account, which allows you to park savings or the proceeds from an asset sale and reduce the interest charged on your loan without locking those funds away.

For buyers who plan to keep working part-time or have rental income that may fluctuate, an owner occupied home loan with an offset account can provide both flexibility and interest savings. If you are purchasing with a smaller deposit or need to preserve capital, some lenders allow you to structure the loan as interest-only for a period, then revert to principal and interest repayments later.

Pre-approval and timing your purchase

Obtaining home loan pre-approval before you start looking at properties gives you certainty around your borrowing capacity and helps you move quickly in a competitive market. In Bardon, where well-located homes often attract multiple offers, having finance confirmed in advance can make the difference between securing the property and missing out.

Pre-approval for retirement buyers requires the same documentation as any home loan application, including proof of income, details of assets and liabilities, and identification. If your income comes from multiple sources, such as superannuation, pension, and rental income, lenders may request additional documentation, including your superannuation statements, Centrelink payment summary, and rental agreements. The process typically takes a few days to a week, depending on the lender and the complexity of your situation.

Accessing a wider panel of lenders

Not all lenders have the same appetite for retirement home loans. Some major banks have strict age limits or will not lend past age 70 or 75, while other lenders, including some non-major banks and specialist lenders, offer loans to borrowers into their 80s provided serviceability and exit strategy are satisfied. Working with a broker gives you access to a wider panel of lenders and ensures your application is submitted to the lender most likely to approve it based on your circumstances.

If you have equity in your current home and are selling to purchase in Bardon, a refinancing strategy or bridging loan may allow you to secure the new property before your existing home settles. This avoids the need to rent temporarily and removes the risk of missing out on a property while waiting for your sale to complete.

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