altering the lending environment, taking a toll on a significant number of home loan borrowers, first-home buyers.
A recent study has revealed that under the current regulations, it is becoming increasingly harder to get a mortgage, pushing the number of first-home buyers looking for advice to a new low. According to the latest survey conducted by economist Tony Alexander, the proportion of respondents with fewer first-home buyers approaching them reached a net 26 per cent. This amounted to a big drop from the net 2 per cent recorded last month, the biggest drop out by first-home buyers since the survey started in June last year.
Alexander is of the view that these figures are a reflection of the changes in loan-to-value rules, as well as the tightening of lending criteria by banks, more than rising interest rates. He noted that with about 75 per cent of low-deposit loans being taken by first-home buyers, the recent reduction in the availability of such mortgages was expected to disproportionately affect them. “But they are also being affected by banks having to undertake the deepest examination of mortgage applicant expenses and income sources and stability on record,” he added.
These altered lending environment is yet to encounter more stringent responsible lending criteria, which will be set out under the new CCCFA regulations from 1 December, making it more difficult for young people, self-employed individuals and borrowers over 50 to qualify for mortgages, he said.
