"Responsible Lending" will squeeze cashflow and reduce spending...

"Responsible Lending" will squeeze cashflow and reduce spending power.
A dear friend of mine, now 60, purchased a new property. With a hefty
50% deposit, had they taken that loan a year ago, it would have been
the traditional 30 year P&I reducing. Now, the bank says, "well, we can't
give you a mortgage that you complete when you are 90 years of age,
that's not responsible lending" They now have a maximum 15 year mortgage
that will conclude when they are 75. It's affordable, but it's takes monies
that would have normally been spent with the butcher, baker, candlestick
maker, out of the economy and redirected back into to the banking system.
We know interest only loans are becoming a thing of the past and so will 30
year mortgages for anyone over 45. Throw in lower LVRs, higher credit scoring
etc and you will start to experience the beginning of the end, as the unexpected
consequences of overshooting the regulatory runway takes hold of the broader economy.