Sunday, July 21, 2019

The Sydney residential property remains one of the most sought after in Australia... are you looking to buy?

APRA's home loan rule relaxation will allow for bigger mortgages

 167/569 George Street, Sydney "The Summit Apartments"
It will now be easier for Australia's prospective home buyers to take out bigger mortgages.

Key points:

  • From today, banks only need to apply a 2.5pc serviceability buffer to determine whether customers can afford mortgage repayments
  • With mortgage rates at record lows, it is significantly below the 7pc minimum interest rate test that APRA mandated 4.5 years ago
  • Relaxed lending standards come amid falling house prices and expectations the RBA will cut rates again
That is because the prudential regulator has decided to relax stringent lending restrictions on banks and other financial institutions.
Effective immediately, banks no longer need to apply a "stress test" to see whether their customers can afford, at least, a 7 per cent interest rate on their residential home loan repayments.
Under the new standards, implemented by the Australian Prudential Regulation Authority (APRA) on Friday, banks will have the freedom to set their own serviceability buffers.
Click here for full article


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