Banks are worried middle aged home buyers are too old to pay off their mortgage before they retire. But a banking expert said banks would never admit to imposing an age limit because it was illegal to discriminate on the basis of age.

New Zealand's main banks reportedly have "unofficial policies" on how they would approach lending to those who decided to buy a first home later in their lives, or who were starting again after a marriage split.

The Human Rights Commission confirmed that in the two years since December 2012, it had received five complaints of alleged unlawful discrimination on the grounds of age, where the claim had been that they were too old for certain mortgage or lending terms.

Of the major banks surveyed by the Herald, ASB and ANZ said the most important factor in their decision to lend was the applicant's ability to service the loan.

A spokesman for BNZ added: "While there is no requirement for lending to be repaid before the age of 65, this is the generally accepted age where bankers must satisfy themselves that our customers can continue to service loan repayments should their income reduce substantially."

Kiwibank spokesman Bruce Thompson said the bank would make an assessment based on a person's ability to service a debt for the term of the loan, taking into account the likelihood of their circumstances changing.

Source: NZ Herald