ANZ Banking Group is the first lender to pass on the benefit of the loosened lending limits announced last week that are tipped to greatly increase purchasing power for homebuyers.
The Australian Prudential Regulation Authority (APRA) last Friday announced it would relax its rules that meant banks had to assess a borrower's ability to repay their mortgage if interest rates rose to 7 per cent.
Under the change in rules, banks would now only have to apply a 2.5 per cent “sensitivity margin” on current interest rates when assessing home loan eligibility.
On Thursday, ANZ told mortgage brokers it would lower its mortgage assessment floor to 5.5 per cent.
ANZ said the new policy would come into effect on Monday.
RateCity estimated that if a bank used an assessment rate of 6 per cent instead of the current 7.25 per cent, a family of four with an average household income of $109,688 would see their borrowing capacity rise by $77,000.
Mortgage broker, and partner at Melbourne’s UFinancial, Daniel Rainey said he was hopeful an assessment floor reduction by the banks would help home buyers return to or enter the market.
"The investors have been out of the market for a while so we might see a little spike there... And the same deal for owner occupiers. The family home might be a bit more achievable," Mr Rainey said.
