'The computer says no' to older borrowers

by Mackenzie McCarty27 Jun 2012

Brokers have flocked to the Austaralian Broker Online forum to detail numerous experiences of older borrowers being knocked back by the banks.

Yesterday, Australian Broker reported that Ray Weir of Financial Solutions in WA had written to Treasuer Wayne Swan to demand legislation be changed to help older borrowers access credit.

Brokers responded on the Australian Broker Online forum with a litany of experiences and opinions with their older clients, many of whom had been refused credit due to potential hardship.

John Robbo was quick to weigh in, saying the problem "badly needs looking at".

"Classic example is a client of mine who is 56 and has a very high salary. Lives in a 9 bedroom 5 bathroom home in Sydney. Property is worth $2.7M and wants a $1.1m refinance. Nobody will do it," he explained.

"He wants to sell the home on or before retirement as it is massive and far too big for two retirees - but all lenders say that selling the property is unacceptable - even though he would have to sell the property if it was unencumbered because of its size. This policy is ridiculous!"

Despite other similar cases coming to light, SteveOz disagreed, saying "it's just not that simple".

"Given today's environment where people are unable to take responsibility for their actions and change their minds like the weather here in Melbourne, you can't just take a clients undertaking that they will 'sell' their property upon retirement if they can't afford the repayments. You've basically put them into hardship anyway!" he said.

However, this was enough to make some brokers' blood boil - as Judy West exclaimed.

"We certainly live in 'Nannysville' in Australia where we treat anyone over the age of 55 (the new 75) as incompetents," she said.

BJ detailed his understanding, which included the longevity risk of a client, and the lack of desire on the part of the bank to be left holding a physical property asset.

Add to the debate! Respond to yesterday's comments, or post a new comment below.


  • by Moonae 27/06/2012 9:41:47 AM

    One of the bigger banks has a policy that says anyone over 46 years of age has to show an exit strategy (and a very onerous and specific one at that). it starts quite early. The fact that actual age is used as a basis of policy (and I can promise it is in black and white) is an age discrimination. No one is going to do anything about it though because its the major banks. The law doesn't apply to the majors.

  • by alex 27/06/2012 10:00:54 AM

    i had the same thing happen to one of my clients he was 55 years of age , wage was 220k .was selling his house to build a new home for the last time and i took me 4 month to find a lender and get it over the line .

  • by Allan Faint 27/06/2012 10:32:11 AM

    I had commented about this months ago quoting the name of a bank who had obviously used age as their reason for the knock back. I then received a call from a very upset BDM who had been instructed to inform me not to do it again. I was basically told that I had no right to have an opinion regarding this.