Currently, banks assess your ability to repay your home loan based on an interest rate of 7 per cent – even though some banks are offering interest rates below 3.5 per cent.
The Australian Prudential Regulation Authority implemented the lending restriction back in 2014 when the Sydney and Melbourne markets were sky rocketing, explains realestate.com.au.
But it has announced this month it is talking to banks about reviewing the 7 per cent buffer.
If it scraps the buffer, it will be yet another move set to make it easier for borrowers, and the banks couldn’t be happier.
The regulator has already removed restrictions on investor loans which again were designed to cool overheated southern capital city property markets which are now well and truly on the downward phase of the property cycle.
While prices never got crazy here in Brisbane, our borrowers will doubtless be pleased to hear that their next home loan application could be a whole lot easier.
Do you see an investor loan in your future? Talk to us about landlording.
What about an owner occupier loan? View our current listings for sale.
Still saving your deposit? Check our listings for rent.