The royal commission and a tougher regulatory environment for the banks in 2018 translated to stricter borrowing conditions for borrowers, and a less competitive market than years gone past.
This environment will carry into the rest of 2019 with more stringent loan assessments from lenders. This is made easy for them by the spending and saving behaviours of borrowers being increasingly online and electronic.
In short: Australians are living their lives online, and it’s easier for lenders to get a full picture of how they manage their money.
Borrowers have “nowhere to hide” when it comes to their spending habits, and should be aware their discretionary spends are on lenders’ radars.
Most banks now require transaction statements, which means borrowers can’t hide with their history of spending. The rise in ‘tap and go’ payments plus technology such as bankstatements.com.au can classify spending into categories and give a lender full visibility on a loan applicant’s spending patterns and how much they save – this level of disclosure is unprecedented.
Examples include Afterpay, Zip Pay, frequent holidays, high spending on credit cards and even spending on gambling, alcohol and dining are being hauled into question if they will be ongoing expenses after their loan has settled or if this constitutes discretionary spending.