Many homeowners in Delahey, Hillside and Sydenham are struggling to pay their mortgage each month, according to new data.
CHOICE released data by the Digital Finance Analytics last month, revealing a number of homeowners nationally are struggling to pay their mortgage, with changes to lending laws expected to increase the number of people in mortgage stress.
As of April 2021, the 3037 postcode which takes in Delahey, Hillside and Sydenham had the ninth highest number of people in mortgage stress in the country, with 7229.
The postcode was one of five Victorian postcodes in the top 10.
CHOICE chief executive Alan Kirkland said people were having to make a choice of how they spend their money each week.
“These are households where from fortnight to fortnight, people are spending more than they are earning,” he said.
“That means that they have to make difficult choices, like whether to put food on the table or keep up with repayments. If they can’t maintain the juggling act, they risk losing their homes.”
Mr Kirkland said safe lending laws changes could see even more people struggling to pay their mortgage each month.
Safe lending laws were introduced in 2009 requiring banks to ensure a loan is able to be repaid “without substantial hardship”, and meets the customer’s “requirements and objectives”.
Mr Kirkland said the laws were put in place to make banks take care to avoid giving people loans they won’t be able to afford to repay.
“If the government gets away with its plan to axe safe lending laws, people who are desperate to get into a rising housing market will be at risk of overexposure and people who need to refinance won’t be adequately protected.
“We call upon the government to ditch its irresponsible plan. Now is not the time to give more power to the banks.“
CHOICE has set up an open letter calling for the safe lending laws to be saved. The letter said that if these laws are introduced there will be a debt disaster.
“This change would contradict the very first recommendation of the banking royal commission. Commissioner Kenneth Hayne called for safe lending laws to be enforced, not dismantled,“ the letter said.
“If this law is passed, people will be left to pick up the pieces for years to come while banks and other lenders are given a blank cheque to profit from aggressive lending. We need you to stand up for our community and protect safe lending laws.“
So far more than 39,000 Australians and 125 organisations have signed an open letter.
