Hungry for your money: Big banks refer home-owners struggling to pay the mortgage to FOOD CHARITIES used by the homeless and those on welfare – so they don’t default on their repayments
- The Foodbank charity traditionally gives food to the unemployed and homeless
- Chief executive Greg Pattinson said banks had approached his group for help
- He said lenders were worried about borrowers struggling to repay their loans
Australian banks are approaching a charity that traditionally gives food to the homeless so their borrowers don’t default on their mortgage repayments.
While interest rates are at a record low, many Australians are spending a third or more of their pay on servicing their home loan – a situation known as mortgage stress.
Foodbank chief executive Greg Pattinson said several banks were worried about the inability of borrowers to meet their monthly repayments.
Australian banks are approaching a charity that traditionally gives food to the homeless so their borrowers don’t default on their mortgage repayments
‘Oh absolutely. We were also approached by a couple of banks, and I’m not going to say which ones,’ he told Daily Mail Australia on Wednesday.
‘Mortgage stress would certainly be part of that.’
Mr Pattinson said an increasing number of people needing help also had jobs.
‘The people that receive the required food assistance, the demographic has changed considerably,’ he said.
‘While the stereotypical unemployed or homeless is still part of the recipient base, over 50 per cent are working people, so people who have jobs and for whatever reason can’t make ends meet.’
The revelation about those needing food was released as the Australian Housing and Urban Research Institute found mortgage debt levels among those aged 55 and older had soared by 600 per cent in less than three decades.
Charity Foodbank said an increasing number of the people they helped had jobs (pictured is a stock image of a young couple in financial stress)
Average debt levels, in real terms adjusted for inflation, had multiplied from $27,000 in 1987 to $185,000 in 2015 as average debt-to-income ratios tripled from 71 to 211 per cent.
Foodbank chief Greg Pattinson said banks were worried about the inability of borrowers to meet their monthly repayments
During that time, the proportion of older Australians still paying off a mortgage had doubled from 14 per cent to 28 per cent, as average annual mortgage repayments, in real terms, climbed from $5,000 to $17,000.
Lead author Professor Rachel Ong, from Curtin University, said the property price boom in Australia’s major cities during the past three decades was largely to blame.
Mr Pattinson said the banks were ‘generally wanting to try and help their clients’ meet their mortgage repayments without throwing them on the street.
‘Increasingly, over the last couple of years, we’ve been seeing … non-traditional agencies and organisations coming to us and saying, “We’ve identified people that require assistance, is there a way we can connect them to Foodbank?”,’ Mr Pattinson said.
Foodbank provides food through welfare agencies, including the Salvation Army, St Vincent de Paul and the Red Cross.
It accepts donations from farmers, retailers and food makers.