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Advisers hopeful about Aussie lending changes

Kiwi mortgage advisers are hopeful that Australia's move to scrap responsible lending rules will lead to changes here.

Monday, September 28th 2020, 8:54AM 1 Comment

On Friday, Australia's government relaxed responsible lending laws, making banks subjects to less onerous oversight. 

A slashing of red tape, designed to stimulate the economy, will remove the Australian Securities and Investments Commission (ASIC) from enforcing responsible lending laws.

Australian treasurer Josh Frydenberg called the changes "the most significant reforms to Australia's credit framework in a decade".

The rules have long been blamed for overly-conservative lending by the Australian-owned big four lenders. 

Brokers hope the Aussie changes will lead to a rethink on mortgage lending in New Zealand. 

NZ lenders remain subject to the Responsible Lending Code, which requires banks to ask highly-detailed questions to borrowers.

Stephen Wilton of The Advice Group said the Code had hurt clients and borrowers over the years.

"The RLC has forced lenders to use a calculator as the yes or no tool and not considered the liquidity of assets and quality of the clients," Wilton said.

"We have been struggling to get them to make the supportive lending decisions that are in the best interests of clients.”

NZFSG's Bruce Patten said the Australian government's decision was "interesting", considering the legal battles caused by the rules. Westpac has been hit with class action lawsuits over breaching responsible lending laws in recent years.

Tags: Lending

« NZFSG merges with KepaGrowing calls to overhaul Responsible Lending Code »

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Comments from our readers

On 28 September 2020 at 3:14 pm Straight shooter said:
The RLC was primarily introduced into NZ to bring into line the predatory practices of high interest payday lenders and high interest personal lenders charging high fees and 50 to 300% plus interest rates. It was however an ill-thought through piece of legislation that captured all lenders, conservative banks included who already had good lending practices in force. The unintended consequence was that good borrowers with good equity and assets could no longer easily fund all sorts of business projects and invest in increasing the housing supply. The RLC captured every lender and they reacted accordingly in the conservative way lenders do which left those needing bridging finance, trade down finance and finance for good projects unable to borrow. I sincerely hope the banks and lenders here lobby the government here and relax this simply prohibitive piece of legislation like our Aussie cousins have. It simply makes sense in these difficult times to allow credit to flow easier than it is.

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Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.55 2.55 2.69 2.79
ANZ 4.44 3.15 3.25 3.39
ANZ Special - 2.55 2.69 2.79
ASB Bank 4.45 2.55 2.69 2.79
Bluestone 3.49 3.49 3.49 3.49
BNZ - Classic - 2.55 2.69 2.79
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 3.15 3.29 3.39
BNZ - TotalMoney 4.55 - - -
CFML Loans 4.95 - - -
Lender Flt 1yr 2yr 3yr
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.45 - - -
Credit Union Baywide 5.65 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
First Credit Union Special 5.85 2.95 3.45 -
Heartland 3.95 2.89 2.97 3.39
Heartland Bank - Online 2.95 1.99 2.35 2.45
Heretaunga Building Society 4.99 3.50 3.40 -
HSBC Premier 4.49 2.45 2.60 2.65
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 3.69 2.45 2.65 2.79
Kainga Ora 4.43 2.93 3.07 3.24
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank 3.40 3.30 3.54 3.54
Kiwibank - Offset 3.40 - - -
Kiwibank Special 3.40 2.55 2.79 2.79
Liberty 5.69 - - -
Nelson Building Society 4.95 3.45 3.49 -
Pepper Essential 4.79 - - -
Resimac 3.39 3.35 2.99 3.35
Lender Flt 1yr 2yr 3yr
SBS Bank 4.54 3.05 2.99 2.99
SBS Bank Special - 2.55 2.49 2.49
The Co-operative Bank - First Home Special - - - -
The Co-operative Bank - Owner Occ 4.40 2.55 2.69 2.79
The Co-operative Bank - Standard 4.40 3.05 3.19 3.29
TSB Bank 5.34 3.29 3.45 3.59
TSB Special 4.54 2.49 2.65 2.79
Wairarapa Building Society 4.99 3.55 3.49 -
Westpac 4.59 ▼3.09 3.29 3.39
Westpac - Offset 4.59 - - -
Westpac Special - ▼2.49 2.69 2.79
Median 4.55 2.94 2.99 2.80

Last updated: 23 October 2020 5:00am

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