The latest APRA figures have found an increase in the flow of residential mortgages to non-major and foreign subsidiary banks, while loan applications to credit unions and the majors have fallen.

These sobering findings, to anyone holding big four bank shares, should come as no surprise to observers of the ever evolving responsible lending guidelines all authorised deposit-taking institutions are invoking to cool the investor market and limit interest only mortgages.

Rest assured these, primarily APRA, regulations are having the desired effect with loans to owner occupiers jumping 32.6 per cent in the year to September 2017 while loans to investors have fallen for the 3rd consecutive quarter.

But of greater concern is just how tough it is to qualify for a home loan Amid regulatory and market concern, banks are scrambling to make mortgage applications tougher, leaving brokers to pick up the pieces, writes MPA editor Sam Richardson

Although ASIC and APRA didn’t exist, applying for a mortgage in 1960s Australia was a highly regulated business. The government controlled not only lending conditions but even your interest rate, and you’d have to head to a branch to apply for a loan. Now you can apply without ever setting foot in a bank or even leaving your computer.

It’s become easier to “ apply to get a mortgage” but tougher to gain an “Approval”. Over four days in late September two major banks added extra checks to an already-extensive application process. ANZ introduced a Customer Interview Guide requiring brokers to ask questions about everything from a customer’s Netflix subscription to whether they were planning to start a family. Three days later CBA introduced a simulator that would show interest-only borrowers how their repayments would change and affect their lifestyle. Customers would be required to fill in an ‘acknowledgement form’ to proceed with an interest-only application.

Closer to home, I recently fielded an enquiry from a salaried applicant seeking approval to build a residence and 2 investment units on 1 title. I fastidiously took down the applicants income, liabilities and living expenses and having input that information into the lenders income qualification calculator shared the maximum amount the applicant could responsibly borrow. While that sum was do-able given the applicants considerable savings, he thanked me and said he’d get back if he had no luck finding a lender that would advance $100k more. I cautioned him on making too many applications and the consequences such a move would have on his Credit Score but undeterred the gentleman proceeded to tell me he’d made 10 applications, none approved, but he was happy to keep shopping.

If you are finding it hard to obtain the loan you are looking for please go to our Free – No Obligation resource and discover the 10 most common mistakes Australian’s often make when applying for a home loan

Who knows it may just help get that illusive approval over the line.