Big News ‘mortgage prison’
Image Brendan Esposito/AAPSource:AAP (Via News.com.au)
“THOUSANDS of Australians are stuck in a “mortgage prison” with new lending criteria leaving them unable to refinance their loans to get a better rate. Changes in bank rules around living expenses calculations have effectively wiped huge amounts off the maximum a bank will allow you to borrow. Many people are now finding they originally borrowed more than a bank would lend them under current conditions, meaning they haven’t got the option of shopping around to get a better interest rate — no bank will lend them the amount they need.
Lending criteria has been tightened in the past year. The ongoing Financial Services Royal Commission is likely to tighten the criteria even further — meaning people will be able to borrow even less than they once did. With homeowners unable to shop around, they can be stuck paying a high interest rate, which will leave them potentially paying tens of thousands, even hundreds of thousands more over the life of a loan.”
~News.com.au
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