To ensure we meet responsible lending obligations we have updated our requirements on Exit Strategy.
As a general rule, Queensland Country expects that Members will repay a loan facility in full from income prior to retirement. For any applications received, Broker Loan notes will need to clearly address the exit strategy when;
- Any applicant is more than 50 years old at the time of application and where the proposed loan term will exceed the Member's retirement age; or
- Any applicant that will be more than 70 years old at loan maturity; and
- As requested by Broker Relationship Manager
For payout at retirement; common and feasible options for payout of the debt may include:
- Superannuation, ongoing income or lump sum loan repayments
- Liquidation of other investments, e.g. shares
- Repayment from sale of investment property
Any plans to simply downsize to a smaller residence or sale of an owner-occupied loan security is not considered a sufficient exit strategy. Plan involving downsizing to a smaller residence would need to be assessed against the Member's likely equity position at retirement. If equity would be insufficient to allow the purchase of another residence, the loan would be assessed as unsuitable.
For lending to continue at Retirement; if it is planned that the debt will continue beyond retirement, the source and adequacy of post-retirement income must be noted
Documentary evidence will be required to substantiate the repayment strategy and would include:
- Superannuation and or investment statements;
- Valuation estimates from a licensed real estate agent and loan statements for related debts for any real estate that is to be sold (and not mortgaged with Queensland Country);
- Rates notice to verify ownership of other real estate (not mortgaged with Queensland Country);
Estimates of Age Pension or any other ongoing income.