Definition
The Canadian and Quebec Charters of Rights prohibit age-based discrimination in credit granting. A lender cannot refuse a loan solely because the borrower is retired or 75 years old.
However, legitimate factors related to retirement influence qualification:
- **Income**: retirement income (QPP/CPP, OAS, RRSP, pension fund, life annuity) is generally stable and accepted. Some income like RRIF are partial withdrawals that require projection. - **Amortization**: a 70-year-old borrower with a 25-year amortization will be 95 at loan end. Some lenders limit amortization so the term ends at age 75-80 max, or require life insurance as protection. - **Equity**: a retiree who has owned for 30 years may have significant home equity, facilitating a loan despite more modest income.
Alternatives for retirees: CHIP (reverse mortgage) to access funds without payments.