Bank 'spying' will make it harder to secure home loans
Article by Mozo
New rules that will allow Australia’s banks and brokers to analyse the spending habits of borrowers will make it even harder for customers to secure credit facilities like home loans, it has been suggested.
The legislation, which takes effect on July 1st, will enable financial institutions to consider potential debt problems by monitoring cash withdrawals and spending by loan applicants. Credit analysis to date has been restricted to looking at a person’s income and fixed outgoings.
Dean Rushton, chief executive officer of broker Loan Market Group, told the Sunday Telegraph: "Qualifying for a mortgage is not just a matter of assessing what debts you have anymore.
"If bank statements show there’s a lot of money being spent at the casino or TAB, then that’s obviously going to ring alarm bells."
Meanwhile Aussie Home Loans chief Stephen Porges said that allowing such prying into consumer spending was a "terrible" move.
Last week, JPMorgan analyst Scott Manning told the Age that mortgage stress is on the increase because of rising interest rates and tighter lending criteria which has increased the need for Aussies to compare home loans.
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