APRA Update - Mortgage Criteria Changes
You may have heard in the media that APRA has just relaxed it’s tough lending criteria on home loans and the banks will have the freedom to set their own serviceability assessments.
What does this mean for you the borrower? The banks are now free to assess your loan application with their own buffers, which in turn may mean you will be able to have an application approved at a higher level. There will of course be rules and guidelines which will still need to be adhered to. They no longer need to “stress test” your application to see if you will be able to afford the loan if interest rates rise to 7%. They must make sure you can afford the loan if rates rise 2.5percentage points above the current rate. APRA have made these changes so loans become more affordable. Suddenly you might find that you are able to borrow a larger sum of money which will bring you one step closer to your new home.
The banks are yet to confirm what their assessment criteria will be, but we will keep in touch and let you know as soon as the changes have been announced.
If you would like to discuss any of these changes or would like your loan reviewed please contact my office on (03) 9940 2608.