Residential mortgage borrowers’ lending has blown out to more than 40 per cent of their disposable income, or 30 per cent above maximum recommended levels, Canstar analysis shows.
The only recorded higher percentage of income used to service debt is 23 years ago when house prices were a quarter of current prices and comparable loans were 137 per cent cheaper, it shows.
Lenders, including ANZ Group, the nation’s third largest mortgage lender, which recently were given greater autonomy by prudential regulators to manage loan volumes, are responding to the growing debt pressure with tougher scrutiny of new and existing borrowers’ ability to pay.
“Stress on borrowers is high and growing, despite record low interest rates,” sa…
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