APRA finalises amendments to guidance on residential mortgage lending

Finally the great news came through today.

Stay tuned for the banks announcing their new assessment rates very soon! And let’s hope it’s no more than 2.5% over the actual loan rate…

5 July 2019

The Australian Prudential Regulation Authority (APRA) has announced that it will proceed with proposed changes to its guidance on the serviceability assessments that authorised deposit-taking institutions (ADIs) perform on residential mortgage applications.
In a letter to ADIs issued today, APRA confirmed its updated guidance on residential mortgage lending will no longer expect them to assess home loan applications using a minimum interest rate of at least 7 per cent. Common industry practice has been to use a rate of 7.25 per cent.
Instead, ADIs will be able to review and set their own minimum interest rate floor for use in serviceability assessments and utilise a revised interest rate buffer of at least 2.5 per cent over the loan’s interest rate.
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APRA finalises amendments to guidance on residential mortgage lending

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