MEDIA RELEASE - Mortgage adviser body applauds govt move to reduce home ownership barriers

New Zealand’s peak body representing finance and mortgage advisers has given the government its in-principle support for its commitment to reduce barriers around consumer lending.

Managing director of the Finance and Mortgage Advisers Association of New Zealand (FAMNZ) Peter White AM was responding to comments by Commerce and Consumer Affairs Minister Andrew Bayly who said the government was removing some regulations from the Credit Contracts and Consumer Finance Act.

The minister also committed to removing the “one size fits all” requirements around loan affordability assessments.

“It has never made sense to have a standard benchmark for household expenditure, when every individual and family is different,” Mr White said.

He said that lenders already have their own assessment criteria and, “it’s clearly not in their financial interests to lend money to someone who can’t afford it.

“But we currently have a situation where even if a lender has assessed that an applicant can afford the loan, they are restricted by unrealistic criteria imposed on them by government regulation.

 “The government shouldn’t be in the business of telling citizens how much pizza they should consume.”

Mr White said FAMNZ was not advocating irresponsible lending, and was waiting to see all of the details of the government’s proposals.

“We commend the government for not only honouring its promise but for taking steps to allow more people to own homes and opening the market for more relevant affordability criteria.”

He said the move may even encourage Kiwis living in Australia to return home, because “Australia has yet to make the call to abolish some of these hurdles.”

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