Industry figures say responsible lending requirements must be maintained as a proposal to relax assessment rules for major loans including mortgages is debated by the Senate.
The proposal comes as a report from consumer group Choice found thousands of Wagga homes are spending more money than they earn, in findings from a national survey of 52,000 homes' income and expenditure.
The report showed Wagga ranked number 10 in NSW for household 'mortgage stress', a metric that measures total outgoing costs against income, not just housing repayments as the name suggests.
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Choice is calling for the proposed amendment to the Consumer Credit Protection Bill be ditched in light of the survey's findings, arguing it will make irresponsible loans too easy to secure.
Though the city's real estate insiders rejected the idea that mortgage repayments are behind the strain on Wagga homes, most agreed that lending laws must stay in place to protect consumers and the market.
Wagga Real Estate's Greg Chamberlain said Wagga's 'mortgage stress' ranking is unrepresentative of real estate in the area, but argued that was thanks to the current laws in place.
"There has to be some level of regulation in place otherwise you might get people into the market but if they can't afford it you'll just put stress into the market and the household," Mr Chamberlain said.
"I think everything is in check, people that can afford the mortgages are getting loans, and they're getting them cheaper than ever before, we should maintain the status quo."
Local mortgage broker Dragan Disljenkovic said when he assesses households, often they are spending more day to day than they realise which could be behind the financial strain.
He insisted, however, that responsible lending laws are vital to enforce.
"You need to be responsible when you're lending and act in the best interest of the customer, that is why there should always be these laws in place," Mr Disljenkovic said.
Fitzpatricks' Paul Gooden said he thought the financial stress was most likely down to spending in other areas and was in favour of relaxing lending requirements.
"The name [mortgage stress] doesn't tell the whole story, there's lots of spending going on in households that's likely driving that," he said.
"From an industry and real estate perspective, people are having a hard time securing finance and this would be good to facilitate that process."
Choice's Patrick Veyret called on The National party to push back against the proposed bill.
Riverina MP Michael McCormack did not commit to opposing the amendment, saying the new legislation will allow businesses and consumers to access credit in a more timely manner.
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