More than half of Tasmanian borrowers under mortgage stress – report

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    More than half of Tasmanian households with home loans are under mortgage stress, even as the government vows to push on with plans to axe responsible lending laws, according to a new report from consumer advocacy group CHOICE.

    The report found that more than 55% of households in Tasmania are under mortgage stress. Launceston leads the pack, with more than 4,700 households under stress.

    “Tasmania was once one of the most affordable places in the country to live, and now communities like Launceston are living on the brink,” said Patrick Veyret, CHOICE banking policy expert. “The Banking Royal Commission was clear: lenders routinely broke safe lending laws and trapped people into unaffordable loans. Commissioner [Kenneth] Hayne recommended that safe lending laws be enforced, not dismantled. Safe lending laws are an essential consumer protection to ensure that banks don’t load people up with excessive debt.”

    The report comes as the federal government continues to look for support in the Senate to roll back responsible lending laws, even as more crossbench senators announce they won’t support the policy.

    Last month, Sen. Pauline Hanson of One Nation came out against the policy. Tasmanian Sen. Jacqui Lambie also signalled opposition to the bill, and South Australian Sen. Rex Patrick has said he’s unlikely to support it.

    However, Treasurer Josh Frydenburg has vowed to push ahead with the legislation.

    Read more: One Nation scuttles government plan to ditch responsible lending laws

    Meanwhile, mortgage stress is becoming a severe problem across the country, according to CHOICE.

    The top South Australian postcode for mortgage stress includes the suburbs surrounding Salisbury in Adelaide’s north, with more than 5,700 households under stress. In Queensland, Toowoomba and surrounding suburbs had more than 9,600 households under mortgage stress.

    The national hotspots for mortgage stress were Western Sydney and Western Melbourne, which collectively had more than 130,000 households on the brink, according to CHOICE.

    “These are households where from fortnight to fortnight, people are spending more than they are earning,” said CHOICE CEO Alan Kirkland. “That means they have to make difficult choices, like whether to put food on the table or keep up with repayments. If they can’t maintain the juggling act, they risk losing their homes.”

    Kirkland said responsible lending laws were vital to make sure banks didn’t extend loans people couldn’t afford to repay.

    “If the government gets away with its plan to axe safe lending laws, people who are desperate to get into a rising housing market will be at risk of overexposure and people who need to refinance won’t be adequately protected,” he said.

    Ryan SmithRyan Smith is currently an executive editor at Key Media, where he started as a journalist in 2013. He has since he worked his way up to managing editor and is now an executive editor. He edits content for several B2B publications across the U.S., Canada, Australia, and New Zealand. He also writes feature content for trade publications for the insurance and mortgage industries.
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