Home borrowers set to receive $100,000 lending boost

Home buyers are set to receive a borrowing boost in the order of $100,000 because of a combination of looming changes to lending standards and interest rate cuts, new modelling shows.

It would increase again, to $598,000, if the Reserve Bank also delivers anticipated interest rate cuts of half a percentage point in coming months, by enabling borrowers to service higher debts off a given income.Combined with the defeat of Labor's negative gearing reforms and the Morrison government's new scheme to help first-time buyers, analysts have begun tipping an end to property price falls across Sydney and Melbourne.

The regulator now proposes borrowers be tested for their capacity to meet repayments at the prevailing mortgage rate - currently around 3.75 per cent - plus a buffer of 2.5 per cent. But it remained to be seen how banks would respond, Mr Morgan said. "The calculations assume - and it's a huge assumption - that lenders choose to relax their standards to the maximum permissible. Some may, but I believe most will be more conservative, at least until we see definite and widespread signs of a housing recovery."

"I don't see the scheme having any significant effect on borrowing capacity or access to finance. Largely, I see it doing little more than allowing a fortunate few to avoid insurance costs - which is, of course, nothing to be sneezed at."

No, house prices will just go up $100,000. They will not become more affordable.

But will it not be the dog chasing its tail on a busy highway with price movements and high household debt?

This is great news!

What royal commission? More debt fuelled madness.

What a joke. Let's pump the market with more money, that fixes everything

Hmm so after the royal commission we find out too many people have mortgage stress, unemployment is up and the solution is to lend more money to the people that can afford it the least during a down housing market? 🤔 They do know this is how the 2007 gfc was created right?

Government wanting more people to join the bubble 🤦🏻‍♂️

Banks are not lending any money this is bullshit

so they start bidding up home prices when distressed prop in western suburbs r high

Just doing the maths here, I make that house prices will go up by, tap tap tap, carry the one, clears throat, one hundred thousand dollars.

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