Banks are combing Aussies’ bank statements for Lotto, adult content and booze spends – and seven in 10 could flunk the lenders’ ‘character’ test tied to home loans.
Fresh Money.com.au research shows most applicants are carrying at least one spending habit that could ring alarm bells.
In a nationally representative survey of more than 1000 Australians, 70 per cent reported at least one behaviour that could count against them in a lender’s character assessment.
Nearly half said they’d recently bought lottery tickets or scratchies (47 per cent), while 30 per cent were buying alcohol more than twice a week.
Almost one in four reported spending on gambling or betting services (23 per cent), or smoking and vaping (23 per cent).
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A smaller but notable five per cent said they’d paid for adult content.
Only 30 per cent reported none of these behaviours.
The ‘character’ check: What banks don’t want you to know
When you apply for a home loan, lenders assess you against the “five Cs of credit”: Collateral, Capacity, Capital, Conditions, and crucially, Character.
While your credit history forms the backbone of this character assessment, it’s those seemingly harmless spending habits that can raise red flags for “addictive” or “risky” behaviour.
Enjoy a gamble on the pokies? It could be costing you!
Money.com.au’s mortgage expert, Debbie Hays, warns that banks are far more thorough than many realise.
“Banks will comb through three months’ worth of bank statements and pay close attention to any spending red flags,” Hays explains.
“They will generally question recurring or excessive purchases, particularly gambling and smoking, but in some rare cases, booze too.”
Hays shared a chilling example.
“I had a client who had declared living expenses at around $3500 per month, but his actual living expenses were well over $6000 per month, with the majority spent at BWS and Smokemart. He was shocked. His actual living expenses blew out his servicing position and his application would have been declined by the selected lender.”
Banks are increasingly scrutinising spending habits, including smoking, gambling, dinking and adult content.
While lenders won’t automatically reject an application for a single transaction, Hays stresses they’re looking for patterns that could “derail your ability to make repayments”.
Banks are bound by strict responsible lending obligations, and if your spending habits suggest you might struggle, they will tell you the decision is based on “spending patterns and serviceability concerns”.
Shockingly, only half of Australians are even aware that lenders assess a borrower’s ‘character’ as part of a home loan application.
Generational divide: Who’s most at risk?
The research also uncovered fascinating generational differences in these “character-damaging” habits.
Gen X are the most likely to have at least one problematic spending habit, with a whopping 57 per cent indulging in lottery tickets and scratchies – the highest of any age group.
Millennials lead the charge in alcohol purchases, with 38 per cent buying booze more than twice a week. They also top the list for adult subscription services, with nine per cent partaking.
Source: Money.com.au
Gen Z stands out for higher-risk behaviours, with 30 per cent reporting gambling or betting activity, and an equal share spending on smoking or vaping products.
Baby Boomers, by contrast, recorded the lowest rates across all spending categories.
So, before you reach for that next scratchie or crack open another cold one, consider if it’s worth the risk to your great Australian dream.
Your bank statement might just be telling a story you don’t want your lender to read.
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