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Friday, 16 October 1970

Mr Uren asked the Minister representing the Minister for Housing, upon notice:

Is the Minister able to say what weekly income is necessary as a pre-requisite to obtaining a $12,000 loan over 25 years from a permanent building society.

Dr Forbes (BARKER, SOUTH AUSTRALIA) (Minister for Health) - The Minister for Housing has provided the following answer to the honourable member's question:

While there is no absolute or general rule adopted by the Permanent Building Societies, they commonly limit the maximum loan they are prepared to grant, on the principle that a borrower should not commit more than a reasonable proportion of his income on interest and repayment instalments on a housing loan. Like other lenders the societies take a number nf factors into account, including the size and reliability of the borrower's income and his other financial commitments and responsibilities, lt would be unusual for a society to agree to repayment terms on a housing loan which involved commitments by the borrower exceeding 25 per cent of his income.

The following table sets out the weekly income needed to repay a $12,000 loan over 25 years without committing more than 25 per cent of the borrower's income, lt is assumed that payments on loan are made at monthly intervals and that they are also compounded at a rest period of 1 month.


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