Westpac quizzes young home buyers on retirement plans

Westpac quizzes young home buyers on retirement plans
Westpac quizzes young home buyers on retirement plans

How young home buyers will repay mortgages and what credit they have against their property for retirement will be part of a quiz Westpac will use as part of their new lending policies.

According to the Australian Financial Review, who obtained internal banking documents, banks and mortgage brokers are to record comments in notes for review.

"These conversations help to ensure your clients have considered any loan commitments they may have in retirement, and they are comfortable with the products they will hold with us when they reach retirement," the internal documents read.

"Retirement inquiries need to be asked and recorded at application.

"Evidence of retirement strategies, such as superannuation balances, future rental income, use of investments, will not be required."

The new lending practice, in place from February 20, will require baks and brokers to ask when they plan to retire and how they plan to service their loan, or repay it in full, during their retirement.

A Westpac spokesperson told the Australian Financial Review the bank "won't speak to home loan applicants about their retirement plans unless they are aged 55 or over - at the time of the loan application - they will turn 75 during the loan term, or they otherwise tell us they are planning to retire within the foreseeable future."

 The spokesperson said the question only applies to new loans and that it did not "make presumptions about a customer's financial circumstances and assess all loan applications on an individual basis."

Tags: 
Home Loans Retirement

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