Mortgage brokers are already putting a heavy emphasis on the living expenses of borrowers when matching them with the most suitable loans for their financial circumstances, according to the Finance Brokers Association of Australia (FBAA).
The comments are in response to a recent call from the chairman of the Australian Prudential Regulation Authority (APRA), who wants the finance industry to be more diligent about getting realistic living expense estimates from borrowers.
“While that’s a very sensible call by chairman Wayne Byers, the main function of finance and mortgage brokers is to make absolutely sure they find products that are not unsuitable for borrowers,” said FBAA executive director Peter White.
“Brokers have been following those guidelines for some time to ensure that borrowers don’t get into debt over their heads and have the financial means to service their loans.”
Mr White said that with brokers now writing around 56 per cent of mortgages, it is more important than ever for them to remain focused on doing the right thing by borrowers.
“As I have been saying for a while, Australia has had low interest rates for a very long time and with that trend likely to come to an end sooner rather than later, it is essential that borrowers are matched with products that are right for them.
“In order to do that, brokers must be mindful of the potential for some borrowers to understate their living expenses.”