Exit Strategy

An exit strategy is a term used for the plan and methods you intend to use to be able to repay your loan at the point of retirement.

Exit strategies can vary from person to person and may depend on age, financial position, income level and plans for retirement.

If your owner-occupied property is the only asset used as security against the loan you will need to provide a written exit strategy to the lender. Remember, simply downsizing to a smaller home at the time of retirement may not be an acceptable exit strategy for most lenders.

If you are unable to provide an exit strategy, lenders may require the term of the proposed loan to not exceed your expected age of retirement.

An accepted retirement age can vary between lenders, but it typically sits between 65-75 years of age.

Common exit strategy plans can include:

  • Downsizing to a smaller house when you reach the age of retirement (not accepted by all lenders).
  • The sale of collected assets such as investment properties or shares.
  • Lump sum loan repayments from superannuation (not accepted by all lenders).
  • Ongoing income from your superannuation to fund your home loan repayments.

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