Banking regulator APRA urging Banks to unwind 7% home loan serviceability buffer!

What does this mean?

  • The Australian Prudential Regulation Authority (APRA) has put its 7% interest rate “floor” under review. 
  • Currently all new mortgages are assessed on their ability to service a loan (ie. make repayments) with a 7.25% interest rate.
  • The floor was introduced in an attempt to contain soring house prices and investor growth – however the regulator states the policy may have reached it’s use-by date.
  • Proposed changes will likely increase the maximum borrowing capacity for borrowers

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