A shocking survey has found that one in four homeowners would fail mortgage tests if they applied for a home loan today.
Banks are cracking down on living expenses, which is making it hard for Australians to get approval for a home loan.
Australians’ expenses are being examined under a microscope with banks trawling through everything from online shopping,
A shocking survey has found that one in four homeowners would fail mortgage tests if they applied for a home loan today (stock image)
A quarter of people who were approved for a home loan a year ago would not pass the tougher rules around living expenses now, according to
According to a recent HashChing broker survey, banks are choosing to review the expenses, rather than measuring their household expenditure.
HashChing’s chief operating officer, Siobhan Hayden, said that it is becoming a lot harder to secure a new home loan or to refinance an existing one.
‘Reviewing a loan applicant’s living expenses is a rational metric to assess suitability for the loan, and doing so should provide more protections for both banks and borrowers,’ Ms Hayden said.
Current homeowners are finding the new method rough, as existing homeowners are unable to refinance their loan and are stuck with an existing rate.
Banks are looking at everything from online shopping, Netflix habits and how often they use a tollway (stock image)
Australians that are stuck with their current loans are dubbed ‘mortgage prisoners’.
Founding principal of Digital Finance Analytics (DFA), Martin North, has said that 40 per cent of people who have tried to refinance their loans have been unsuccessful.
This is happening because the bar to get a home loan has been raised and while applicants may have passed their initial test, they are falling short of ongoing criteria.
This follows years of banking reform and the fallout from the banking royal commission.