Banks calculate house age primarily using the year the property was originally constructed. This date is typically sourced from public records such as county assessor databases, building permits, or title reports. When applying for a mortgage, borrowers often provide the purchase date, but lenders independently verify the build year through third-party appraisals or automated valuation models (AVMs). Renovations or additions do not reduce the assessed age unless explicitly documented and approved by local authorities. For example, a home built in 1950 with a 2020 renovation remains classified as 70 years old for lending purposes.

The focus on original construction dates stems from risk assessment tied to property condition and market value. Older homes generally face higher maintenance costs, outdated infrastructure, and potential depreciation, which may impact loan approval terms or interest rates. Data from the Federal Housing Finance Agency (FHFA) shows that mortgages for properties built before 1970 account for 12% of total loans, with lenders charging 0.5–1.0% higher interest rates compared to newer homes. The National Association of Realtors (NAR) reports that 35% of buyers prioritize older homes, yet lenders limit exposure by imposing maximum age caps, such as 100 years, for conforming loans. Additionally, the FHFA notes that 60% of banks require separate inspections for homes over 50 years old to assess structural integrity, further highlighting the risk mitigation rationale. This approach balances market demand with financial prudence, ensuring loans remain sustainable amid long-term liability.