No jab, no mortgage? |

Will unvaccinated people, who are increasingly at risk of losing their jobs, find it difficult to obtain a home loan?

That’s a question raised by an anecdote that a Canterbury mortgage broker shared with economist Tony Alexander, in his latest survey of mortgage advisors.

The anonymous broker told Alexander they had a vaccine-hesitant customer who had their funds taken away due to income uncertainty.

The broker explained, “I had my first vax situation in which we were about to create a construction loan structure and clients informed that they had been canceled because they were not vaxed. I told them that I had to inform the bank and that the loan would be withdrawn. While waiting to see if they will vax or not to continue the construction.

The problem here is the potential borrower’s ability to repay their debt, not their immunization status as such.

Banks interested in borrower income

Nonetheless, the anecdote prompted to ask banks if they would start factoring vaccination status into their credit risk assessments.

Banks that have responded to the survey so far have said they are not asking for vaccination status, but asking potential borrowers about their income and whether that is likely to change.

ANZ said, “We collect a range of information about a client’s income and expenses as part of our affordability calculation, but vaccination status is not one of those factors.”

BNZ said, “We take into account a range of factors for loan applications that ensure that a client can repay their loan. We don’t specifically ask for immunization status, but our standard process is to ask clients to let us know if their financial situation is likely to change in the near future.

Kiwibank said, “As part of the care and diligence of a responsible lender, we will always ask if a borrower expects to see a change in their income over the next 12 months.”

ASB said, “We don’t ask mortgage applicants about their immunization status. In order to ensure that we take into account a client’s full financial situation, we check if they expect their income to change in the next 12 months – this could be due to a change in job, contract or circumstances.

Alexander: banks are unlikely to verify vaccination status

Tony Alexander, who was previously BNZ’s chief economist, said he couldn’t envision banks asking customers to disclose their vaccination status during credit scores.

His view was that an unvaccinated person did not pose a greater risk than a vaccinated person, who could also see their income reduced for a number of reasons.

Alexander said the tight job market means that someone who loses their job may not have too much trouble finding another.

“The tight job market for me is the deciding factor here,” he said.

Banks would have to prove vaccination status was required for credit assessment

Another question raised by the discussion is whether banks could even ask potential borrowers for their vaccination status under the Privacy Act.

Tim Sherman, partner at Chapman Tripp law firm, said banks should be able to prove that vaccination status affects credit risk.

He argued that a case could be made. However, another partner at the firm, Kelly McFadzien, was less certain.

She explained, “The Privacy Act requires that information may only be collected for lawful purposes related to a function or activity of the agency concerned, and it is necessary for that purpose…

“It is a bit early to understand whether or not immunization status would be really necessary to assess whether a person is eligible according to the bank’s credit criteria.”

McFadzien said the case for health insurers requiring customers to share their immunization status was stronger.

McFadzien and Sherman both said that under the Privacy Act, banks should inform customers of the consequences of sharing their vaccination status.

The government’s vaccination mandate affects around 40% of the workforce, but more employees will likely need to be vaccinated to keep their jobs, as employers in non-mandated sectors impose their own vaccination requirements.

Only 9% of people over 12 in New Zealand have not received at least one dose of the vaccine.

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