How to Safely Borrow in Your 50s and 60s With High Assets

You can absolutely borrow in your 50s and 60s when your assets are high and income has peaked, but only if you give banks two things: clear proof you can afford the loan now, and a believable plan to clear or reduce it before or soon after retirement. That means tightening your income story, choosing the right loan term, and documenting your exit strategy up front.

Here’s how to get decision‑grade clarity this week.

Turning strong assets into a clear exit strategy is the key to borrowing safely in your 50s and 60s.

1. How banks really assess older borrowers

Lenders don’t have a hard age cut‑off, but from roughly 50 onwards they shift the question from “Can you afford this now?” to “What happens when you stop working?”

Key points they look at:

1. Income strength and stability – salary, business income, pensions, investments.
2. Remaining working life – your realistic retirement age, not a fantasy 75.
3. Debt profile – total limits across home, investment and business loans.
4. Exit strategy – how the loan will be repaid or reduced when work stops.

Under APRA guidance, banks must test your repayments at an interest rate at least 3% above the actual rate.[8] In practice, that often means modelling repayments at 8–9% even if your rate starts with a 5.

As a safety check, aim to keep total home and investment loan repayments under roughly 30–35% of your after‑tax income at that stressed rate.[1][3][4]

Quick example

• Loan: $1.5m over 25 years, 6.0% P&I (tested at 9.0%).
• Monthly repayment at 9.0% ≈ $12,580.
• To stay near 30% of after‑tax income at that stressed rate, you’d want net household income of at least $42k per month ($504k per year).

If your income is lower but your assets are strong, the structure and exit strategy become critical.

2. Turning assets into usable borrowing power

Being asset‑rich doesn’t help unless you turn some of that into recognisable income or a clear exit.

Common levers:

• Investment property – rental income (often shaded by 20–30%) plus potential sale as an exit strategy.
• Share portfolios – regular, evidenced dividends help; relying on ad‑hoc sell‑downs usually doesn’t.
• Trusts and companies – lenders will use distributions and company profits if they’re consistent and well‑documented.
• Super/SMSF – generally can’t support your home loan directly, but SMSF pensions near or after 60 can support downsizing plans.

If your structure is messy or income is “all over the place”, fix that first. Articles like "Making Complex Income Work For You On A Home Loan" and "Structuring Trust, Investment and SMSF Income For Big East‑Side Loans" walk through how to present trust, company and portfolio income in a way banks accept.

Action for this week:

1. List each asset over $50k (property, shares, cash, business interests).
2. Next to each, write either “income source” (rent, dividends) or “exit asset” (can be sold to clear or reduce the loan).
3. If something is neither, it probably won’t help your application.