Royal commission’s “top three losers”
by Madison Utley 15 May 2019, Broker News
According to a 25-year veteran of the banking and finance industry, “the top three losers” from the royal commission were single parent families, lower income earners and borrowers over 45 years of age.
“The unintended outcome of the lending environment created by both the royal commission and APRA is that those who are most negatively affected are the very people you would like to most help in the community,” said Roger Ward, director of Champion Mortgage Brokers.
Ward says the combination of higher assessment rates, higher assessment of living costs, and the finance industry using a retirement age of 70, have pushed already marginalised groups even further from achieving their home ownership goals.
APRA changes “unlikely” to invigorate housing market
by Madison Utley 23 May 2019, Broker News
Roger Ward, director of Champion Mortgage Brokers, agrees that the current 7.25% assessment rate is just one of six lending standards that have contributed to the credit squeeze.
Drawing from his 25 years in the banking and finance industry, Ward outlined the remaining five challenges to lending as:
Banks considering borrowers’ capacity to repay for the full 25 to 30 years of a mortgage term, despite most loans now only lasting seven to eight years
A one-dimensional and inaccurate approach to identifying spending habits and current costs of living
Changes in credit reporting providing data on the last 24 months’ payment history on credit cards, with one late payment sometimes enough to be declined by a bank.
– LVR changes and limitations, especially those impacting investors
– Tiered interest rates dependant on the size of the original deposit
While allowing lenders to review and set their own minimum interest rate floor will undoubtedly help some borrowers access previously unreachable mortgages, the housing market will require stimulation from elsewhere in order for dwelling values to begin their rise-