If the banks do not use this higher test, they will be financially penalised by having to hold more reserves against losses, which will reduce their profitability.For home loan applicants, it also means the maximum amount people can borrow relative to their income and expenses will be lower than it was under the current serviceability test of 2.5 per cent.
She's worried if she misses out this month she'll miss the boat for properties in her area, because she's been searching actively for 12 months and it's been a slog."If [house prices] accelerated another 5 or 10 per cent it'd be out of our reach. Analysts at RateCity.com.au estimate the average family's maximum borrowing capacity could drop by $35,025 under the new rules.
"These changes will clip the wings of people borrowing at their capacity," RateCity.com.au research director Sally Tindall said. For example, Commonwealth Bank says any customers that already have pre-approval will be honoured, and customers that have exchanged but not settled will be honoured, but new borrowers coming to the bankCommonwealth Bank chief executive Matt Comyn has welcomed the tighter lending rules.
I find it weird that the 2 young people featured in the story who are both unhappy about being 'caught in the middle' and being forced to borrow less are both working in the real estate industry... any comments PopTheOzBubble ? I've done a couple of google searches to confirm
Switch the incentives away from investors and towards owner-occupiers
Stop 🛑 the foreigners
So now it is even harder for low income families to get out of the rent cycle. How about some low income loans, with a reduced deposit requirement to help them. Paying $450 per week rent when you could be paying $350 in mortgage just doesn’t make sense.
So APRA applied lending standards before, then didn't, now applies them again? So lending standards are not actually about standards for lending but simply at tool to manage the property market.
DanMustGo 🙏