The hot topic of last week was about a 66-year-old who complained of age discrimination when he could not get refinancing from
NAB.
However, the human rights division of the Victorian Civil and Administrative Tribunal ruled in the bank’s favour, saying it is reasonable for a lender to have regard to a prospective borrower’s capacity to repay.
Brokers were divided as to whether this was fair or not.
Dpathle said lenders do not take age into consideration enough. “Hopefully this case is an example to all of us getting close to retirement (or already in retirement) that there is no point having a debt that costs more each year than the asset it is over.”
Gray Gray agreed: “Excellent to see a bank taking an ethical lending approach. Too many people are not taking retirement plans into account for servicing loan.”
Papery offered up comment on how hard it is for retirees these days.
“I cannot understand why access to quality individualised & cost effective (if not free) life time financial planning/retirement advice is not part of the govts edict given the current discussions around Retirement, Pensions & Super… For Joe average, it’s tough enough trying to earn enough to keep the average family going in today’s economy, let alone squirrelling away another chunk for a retirement you may not live to see.”
Bottom Line thought lawyer Jon Denovan’s advice in the article to brokers was flawed. “Decline them based on age, but make up another reason...bizarre. Wouldn't that be perjury if bank's then stuck to that ruse in court??”
But
Frank – who got Comment of the Week – disagreed with that and believed Denovan meant brokers have a responsibility to educate customers around why their application for finance has been declined, not make up a reason.
“Banks don’t decline a loan based on the age of a customer, they decline it because they will be older than the retirement age before the loan expires. IE why would you give a 66 year old applicant a loan with a 30 year term if they don’t have an exit strategy in place.
“Too many brokers and banks chose the quick option and don’t go into enough detail educating customers up front before they take an application. “Too many brokers and banks chose the quick option and don’t go into enough detail educating customers up front before they take an application.”
Thanks to all our commentators this week.
