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The man, whom the Otago Daily Times has agreed not to name, said he was told by his mortgage broker the expense of going to therapy could reduce his chances of getting a bank loan.
He described the situation as "bloody ridiculous".
He is one of many to come forward to share their difficulties in securing a home loan after the Government’s changes to the Credit Contracts and Consumer Finance Act (CCCFA).
Others who have shared their stories with the ODT say that they have been declined mortgages over such things as Kmart shopping trips, eating at restaurants and Netflix accounts.
The new rules, which came into effect in December last year, were intended to crack down on loan sharks, but have caused banks to more closely vet spending habits and personal finances.
The hospitality worker knew after reading recent media articles about the CCCFA, his $18 spend a week at the gym could be pulled up during the application.
But during a meeting last week, the mortgage broker flagged his $184 a fortnight spend for his therapist, whom he had been seeing for about a year.
If approved, the cost of the house combined with the deposit would likely have led to mortgage repayments similar to what he now paid in rent.
In order to increase his chances of the application getting approved by the bank, the mortgage broker advised him to get his therapist to send a letter saying that he would no longer need their services.
The broker did not tell him he would not get approved by the bank because of the spend "but the vibe I got was that it would be such a black stain on my record, it would prevent me from getting it".
The letter from his therapist, seen by the ODT, said he had advised he would not be continuing to use their services, and therefore the payments would stop.
"I wasn’t going to stop going ... I literally had to get them to lie for me," he said.
The therapist offered to let him pay in cash in order for him to continue going to therapy without affecting his chances of getting a mortgage.
The man was not angry or frustrated at his mortgage broker.
"They were just trying to do their job under the new rules. I understand that."
However, he was concerned being advised to stop therapy could have a significant effect on someone in a vulnerable state.
"I was lucky, it didn’t really worry me, but it could have been really hurtful for someone," he said.
Someone’s spending on therapy should be seen as a "green flag" not a "red flag".
"You literally go there to better yourself and you’d think it would actually improve your chances of being able to make the repayments," he said.
The man had pulled out of the application and now his mother was making an application for the mortgage to be in her name.
"I am very privileged she can do that for me. Not many people would be in our position," he said.
Minister of Commerce and Consumer Affairs David Clark ordered a review of the rule changes earlier this month, which is being undertaken by the Council of Financial Regulators.