AUSTRALIAN BANKERS’ ASSOCIATION WARNS AGAINST
MISINTERPRETATION OF NEW SURVEY

Sydney, 1 March, 2005: The Australian Bankers’ Association (ABA) has warned against misinterpretation of survey results released today that says 28 per cent of mortgage borrowers “would have trouble” making payments if interest rates rise 0.5 per cent.
 
Despite the single qualifying sentence , the risk is that in the current environment, the Hawker Britton/UMR survey’s media release will be interpreted as suggesting 28 per cent of borrowers are at risk of default if interest rates increase 0.5 per cent.

Banks and other lenders include an interest rate buffer into their home loan application assessments to ensure themselves the borrower will continue to make payments if interest rates increase above expectations.

Banks and other lenders are obligated to lend money only to those loan applicants that they are confident will repay the loan. The main causes of loan default continue to be life stage events such as unemployment, family breakdown and ill-health.


For further information:

Heather Wellard
Director, ABA Public Relations
Phone: 02 8298 0411
Mobile: 0409 830 439
 

ENDS