Banks less willing to lend

Banks are less willing to lend following changes to the Credit Contracts and Consumer Finance Act, a mortgage adviser survey shows.

And despite the environment of rising interest rates, mortgage advisers report seeing fewer homeowners asking for advice about refinancing, (e.g. top-ups and fixed mortgage rate rollovers).

Changes under the Credit Contracts and Consumer Finance Act (CCCFA) from December 1, aim to protect consumers from unaffordable debt, requiring lenders to ensure loans are suitable and affordable. The level of evidence required around affordability has increased, and has been labeled as “overly prescriptive”, and that bank statements were put under the microscope.

In a January survey of 69 nationwide mortgage advisers, by Tony Alexander and mortgages.co.nz, over three-quarters of the respondents (83 percent), say banks are less willing to lend.

Asked whether more homeowners are enquiring about refinancing, a net 29 percent reported seeing less, up from a net 13 percent seeing less in December.