APRA’s proposed changes could now increase the borrowing capacity of many Australians and lead to an increase in people taking out a mortgage. To find out more about how these changes could help you, please speak to one of our friendly Windermere sales agents.
First home buyers at Windermere are set to receive a boost when borrowing for their first home, courtesy of a proposal from the Australian Prudential Regulation Authority (APRA).
APRA has unveiled a plan to loosen the requirements for lenders to assess whether a borrower can afford their repayments using a minimum interest rate of at least 7 per cent, under a rule introduced in December 2014 as part of APRA’s efforts to reinforce sound residential lending standards.
However, APRA’s new proposal suggests lenders should be permitted to review and set their own minimum interest rate floor when assessing a borrower’s ability to make loan repayments.
With mortgage rates currently sitting below 4 per cent for many owner-occupier borrowers, and rates likely to remain at record lows for an extended period, the 7 per cent figure is no longer realistic.
Indeed, according to the Urban Development Institute of Australia (UDIA), the current assessment rate of 7% is making borrowing increasingly difficult, causing thousands of people to be locked out of buying their first home. Instead, the UDIA is suggesting that a benchmark rate of 5.5% would be more prudent.
APRA’s proposed changes could now increase the borrowing capacity of many Australians and lead to an increase in people taking out a mortgage. To find out more about how these changes could help you, please speak to one of our friendly Windermere sales agents.
