The hidden victims of the RBA interest rate rise have been revealed

As homeowners face another rate hike, finance experts reveal the Aussies who are having their loan applications rejected immediately.

As Aussie homeowners face another massive interest rate hike, finance experts have revealed the real “hidden victims” of the changes.

The Reserve Bank Australia (RBA) increased interest rates on Tuesday for the sixth successive month, hiking the cash rate by 25 basis points to 2.60 per cent.

And its Australians who have been divorced or separated that are paying the ultimate price, with many finding it almost impossible to refinance or take out a new loan.

Managing director of the Finance Brokers Association of Australia Peter White said as credit assessments tightened, those who have recently divorced or separated are “paying the price” for actions of their former partner and the circumstances in which they found themselves in.

The Reserve Bank of Australia has increased interest rates for the sixth successive time. Picture: AAP Image

He labelled the situation as “grossly unfair” while also blaming the “lack of compassion” from lenders for leaving these individuals in a vulnerable situation.

“It’s always been a more difficult path for people in this situation, but in the past it has been easier for them to buy out a property that was owned jointly, or refinance to start a new life,” Mr White said.

“But now banks are simply rejecting applications outright, due solely to financial problems around the relationship breakdown, and despite an applicant having an excellent credit history to that point.”

Mr White said lenders were responsible for assessing “every person and situation” individually while taking into consideration the “circumstances of any finance problems”.

“Relationship breakdowns are messy,” he said.

“Sometimes one partner makes decisions that affect the other, or the stress of the situation causes medical issues, or legal and relocation costs put financial pressure on a couple and repayments fall behind.

“But surely the Australian spirit of a fair go must be extended to people who deserve a chance to reposition their lives and move on from a difficult situation.”

However, Mr White said while some brokers have been fighting to help their clients, the real solution fell in the hands of the banks to change the way they are making assessments.

“We understand there are responsible lending criteria, but this is no excuse for denying people who meet these criteria the opportunity to start again by holding a past circumstance against them forever,” he said.

“Banks can easily extend some compassion instead of being pig-headed and applying an overarching and inflexible policy for everyone.”