Getting a home loan could be about to get a whole lot harder, thanks to the Financial Services Royal Commission. That’s not just bad news for people hoping to buy — in Australia’s home-loan-dependent economy, it could be very disruptive.

The banking royal commission has been absolutely gobsmacking, and it is going to have serious consequences.

ANZ chief executive officer Shayne Elliott said the inquiry would make the home loan approval process longer and more onerous.

“People are still going to buy a home, so it doesn’t change fundamental demand, but it will change the process and will probably make it harder for people to be successful in their applications,” he told The Australian Financial Review.

One of the biggest surprises from the royal commission has been discovering how lax banks have been when they hand out home loans.

When you apply for a loan, banks are supposed to check to find out how much money you spend. They are supposed to know whether you shop at Aldi or the organic grocer, whether you’re Mitsubishi or Mercedes, etc.

>But in fact, we learn, most approved home loans don’t depend on any sort of actual assessment of your monthly spend. Instead, some banks use a measure called HEM (Household Expenditure Measure) for nearly three-quarters of loans.

For a family of four, they simply write in the HEM expense measure of $32,400 a year. If you’re thinking that’d be a generous budget, I can only assume you fell into a coma sometime around 1996 and have just woken up to read this story. I live in a family of two and we will probably spend that much by midwinter this year.

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