A mortgage exit strategy, is effectively a backup mortgage repayment plan.

All home loans actually have an exit strategy, which is essentially, paying off your mortgage.

Lenders do however, require you to provide an exit strategy when the standard one doesn’t work and some lenders won’t approve mortgages for investment properties, unless you provide an acceptable exit strategy.

Development loans, generally require exit strategies as well, for example, a property developer may not be able to afford keeping all of their units, so the bank will accept an exit strategy to sell some, if not all of the units.

Lenders will commonly, accept the following as good mortgage exit strategies:

• Reducing the loan term
• Downsizing your property
• Using your superannuation
• selling the property (investment property)

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