Commonwealth Bank's shocking advice revealed
Commonwealth Bank has been accused of giving struggling first home buyers shocking advice, through the major banks controversial online chat function.
News.com.au reports economist Lindsay David set the big four bank up for a sting, posing as a would-be first home buyer while chatting to a CommBank sales agent, and asking if he could borrow $800,000 to buy an $800,000 house.
“I haven’t really saved before but my parents said they would provide a parental guarantee by using equity in their home,” he wrote. “Do you provide loans like this?”
The CommBank agent replied, “Yes, we definitely lend using guarantors, this is a great option. It’s difficult to save a deposit with the price of houses in Sydney isn’t it! :)”
David said this sort of behaviour occurs with all banks.
“The reality is it’s possible in Sydney to eat your smashed avo and still get into the housing market because you don’t need to save,” he said.
“When people wonder why there are so many first home buyers out there who can afford to buy a property in Sydney, look no further. People are just using equity instead of cash. No one appears to have the cash to buy these places, they’re using equity because everyone’s house prices keep going up.”
CommBank were quick to hit back, with a spokesman telling News.com.au, ““In line with our responsible lending standards, we only provide loans to customers who meet our stringent lending criteria and who are able to service the loan on an ongoing basis.
“While guarantors can help with a deposit, all customers who apply for a guarantor loan are assessed against these high standards, and are able to afford their repayments. Customers with a guarantor loan are less likely than average customers to default on their repayments.”
But David is not convinced.
“Sydney is one of the most expensive housing markets in the world and still hands down one of the easiest places in the world to get a loan to buy a house,” he said.
“You’d probably say a lot of the loans being issued today are not going to be repaid.”
What are your thoughts? Have you had an issue with a big bank?