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NCCP will hurt older borrowers: RE/MAX

Staff Reporter 4 minute read

Jessica Darnbrough

The new National Consumer Credit Protection Act could negatively impact any borrower over the age of 35, RE/MAX Western Australia managing director Geoff Baldwin has said.

According to Mr Baldwin, under the new responsible lending obligations, a broker will have to ensure that a borrower has the capacity to repay the loan in full at retirement age without selling their owner occupied property.

“These changes mean that a borrower aged, say 55 can no longer take out a loan over 30 years but will be restricted to a much shorter term unless they can demonstrate that they will have superannuation or other assets they can sell to finalise the loan at retirement,” he said.


“Obviously this would mean much higher repayments and in many cases it will disqualify people and exclude them from the market.

“There is a real possibility that people may sell their current home thinking that they will easily qualify for a new loan to upgrade to a more expensive house only to find themselves caught in a situation where they have sold and are locked out of the market.

Mr Baldwin said if a borrower has a sizeable superannuation fund or equity in other investments there may not be a problem however, currently many people in their 40s and 50s are not in this fortunate situation.

“It would also be an expectation that the government show how this legislation is not breaching discrimination laws as it clearly has the capacity to eliminate people’s opportunities based on their age.

“The possible impact of this legislation has been totally underestimated and there has been little or no public education or communication to ensure people are aware of how they may be affected.”


NCCP will hurt older borrowers: RE/MAX
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