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Funding costs hurt borrowers

Staff Reporter 3 minute read

By: Jessica Darnbrough

Australia’s banks are imposing hurdles on borrowers that prevent them from getting a loan, according to Aussie.

The non-bank financial services group’s chief executive officer Stephen Porges said money sourced from global credit markets is now priced considerably higher than it was a few years ago, which means banks can and are being selective as to who they lend to.

“In effect, they’re cherry-picking potential customers with the best capacity to repay debt and are imposing hurdles on the others,” he said.

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Mr Porges said unfortunately, the majority of borrowers are unaware of these hurdles – which vary from bank to bank, and as a result their applications are rejected through no real fault of their own.

“Being rejected for a loan could adversely affect their credit rating, and in turn this could also affect them the next time they go to a financial institution to borrow money.”

Mr Porges said he is advising all Australians that are considering purchasing a home to use a mortgage broker to help them obtain finance.

Funding costs hurt borrowers
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