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Alex I completely agree with you. This loan will be abused. Even in the example I gave, chances are people would be able to find a better way around their problems. This country doesn't have an affordability crisis, it has a debt crisis and lending practices like this will only make it worse.

After talking to some lenders today, I can see a scenario where this type of loan may be suitable, but it all depends on the exit strategy. A couple is purchasing a home for $100k, and the wife is due to have a baby in the near future. For the moment serviceability is fine, but in a few...

I know of another lender who is looking to introduce a similar product in May, it appears they've been beaten to the market. Details are not available yet. This sort of lending practice is quite a concern to me. I believe Australia is fast heading towards a severe debt crisis. Our debt to...

There are a few funders out there with this type of product available now. I can see how it might be interesting to a first home owner, but I think that there are better alternatives available to most people.