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Over half of Tasmanians with home loans are in mortgage crisis: CHOICE

55% of Tasmanian households with a mortgage are on the brink, as crossbench Senators announce they won’t support the Federal Government’s policy to axe safe lending laws.

Consumer group CHOICE has released data revealing Tasmania as the state hardest hit by Australia's mortgage crisis.

Data from Digital Finance Analytics shows that 55.79% of households with a mortgage in Tasmania are deemed to be in mortgage stress.* Launceston leads the list with over 4700 households on the brink.

*Data from Digital Finance Analytics, collected in April 2021.

"55% of Tasmanians with a mortgage are in mortgage stress. Tasmania was once one of the most affordable places in the country to live and now communities like Launceston are living on the brink," says CHOICE banking policy expert Patrick Veyret.

"While the early signs of Australia's economic recovery are promising, many families are faced with underemployment, stagnant wage growth, and government support being wound back," says Mr Veyret.

"Banks profit from trapping people in an endless cycle of debt. Financial counsellors regularly report that people will often forgo spending money on essentials such as utilities and food before they default on their mortgage," says Mr Veyret.

"The Banking Royal Commission was clear: lenders routinely broke safe lending laws and trapped people into unaffordable loans. Commissioner Hayne recommended that safe lending laws be enforced, not dismantled. Safe lending laws are an essential consumer protection to ensure that banks don't load people up with excessive debt, " says Mr Veyret.

This new data comes as the Federal Government struggles to gain enough support in the Senate to axe safe lending laws, with more crossbench Senators announcing they will not support the Government's policy.

"Axing safe lending would be disastrous for the Tasmanian community and economy. People across the state are already doing it tough, they don't need to be burdened with more reckless bank lending," says Mr Veyret.

"Senator Jacqui Lambie has a strong history of standing up for consumer protections against the power of the big banks. We are hopeful she will stand up for Tasmanian households doing it tough and vote against the legislation," says Mr Veyret.

Over 39,000 people and 125 community sector organisations, including CHOICE, Anglicare Tasmania, Community Legal Centres Tasmania, Financial Counsellors Association Tasmania, Hobart Community Legal Service, and Uniting Vic.Tas have endorsed an open letter calling on politicians to protect safe lending laws.

Media contact: 0430 172 669, [email protected]

Editor's notes:

Top 10 TAS postcodes in mortgage stress (by count)

Rank

Postcode

Suburbs

Number of households in mortgage stress

1

7250

East Launceston, Launceston, Newstead, Norwood, Prospect, Prospect Vale, Ravenswood, Riverside, St Leonards, Summerhill, Travellers Rest, Trevallyn, Waverley, West Launceston

4735

2

7018

Bellerive, Howrah, Montagu Bay, Mornington, Rosny, Rosny Park, Tranmere, Warrane

3123

3

7011

Austins Ferry, Berriedale, Chigwell, Claremont

1898

4

7010

Dowsing Point, Glenorchy, Goodwood, Montrose, Rosetta

1846

5

7009

Derwent Park, Lutana, Moonah

1805

6

7140

Black Hills, Boyer, Bradys Lake, Bronte Park, Bushy Park, Butlers Gorge, Dee, Derwent Bridge, Ellendale, Fentonbury, Fitzgerald, Glenfern, Glenora, Gretna, Hamilton, Hayes, Hollow Tree, Karanja, Lachlan, Lake St Clair, Macquarie Plains, Magra, Malbina, Maydena, Molesworth, Moogara, Mount Field, Mount Lloyd, National Park, New Norfolk, Osterley, Ouse, Plenty, Rosegarland, Sorell Creek, Strickland, Tarraleah, Tyenna, Uxbridge, Victoria Valley, Wayatinah, Westerway

1619

7

7249

Kings Meadows, Punchbowl, South Launceston, Youngtown

1392

8

7109

Crabtree, Cradoc, Glaziers Bay, Glen Huon, Glendevie, Grove, Hastings, Huonville, Judbury, Lonnavale, Lower Longley, Lucaston, Lune River, Lymington, Mountain River, Petcheys Bay, Raminea, Ranelagh, Southport, Strathblane, Waterloo, Wattle Grove, Woodstock

1376

9

7050

Kingston, Kingston Beach

1292

10

7017

Grasstree Hill, Honeywood, Old Beach, Otago, Tea Tree

1273