Big 4 Amend to APRA’s New Regulation

August 5, 2019
| Alina Kuzminova

In our recent blog about the APRA changes, we discussed how the new reform could increase your borrowing capacity.  Ever since APRA decided to relax the lending restrictions, more and more banks are passing the benefit onto their clients. Now, if you are a first home buyer or want to refinance your mortgage, it’s a great time to act on your property dreams.

Why do you need to know your lender’s serviceability rate?

As one of the determining factors, lenders implement a serviceability rate to see if the applicant will be able to regularly repay their home loan while still living comfortably if interest rates go up. Each bank has its own regulations when assessing your eligibility for a loan, so it’s important to choose a lender that suits your needs.

What are Big 4’s new serviceability rules?

  • ANZ introduced a new floor rate of 5.5 per cent with a buffer of 2.5 per cent on 15 July 2019. 
  • National Australia Bank (NAB) will implement the serviceability rate of 5.5 per cent and a buffer of 2.5 per cent starting from 5 August 2019.
  • Commonwealth Bank (CBA) has introduced a new 5.75 per cent interest rate floor and 2.5 per cent buffer, effective from 19 July 2019.
  • Westpac changes came to effect on 16 July 2019, with the new serviceability rate dropping to 5.75 per cent and a buffer rate of 2.5 per cent.

 

What does it mean for you?

Essentially, it is now easier for you to get your mortgage application approved. In other cases, if you were already eligible for a home loan, your borrowing capacity is likely to increase, which will help get you closer to the desired suburb you want to live in or upsize your home.

It can be confusing to identify what would work best for your needs on your own, therefore our finance and mortgage team can help you with industry advice and do all the hard work for you to get the best deal available. Get in touch with our team to find out how you can get closer to achieving this life milestone.

Download our First Home Buyers guide here.

 

 

Alina Kuzminova
Article by Alina Kuzminova
From travelling the world to delving into the communications industry, Alina joined Coronis and the real estate industry in 2019. By the time Alina turned 21, she has lived in four countries by herself, exploring the possibilities our world has…
Join over 45,000 local homeowners & investors
Get our latest articles & investment tips, straight to your inbox - weekly
Browse Categories

Thinking of selling?

Just researching the market?

Get a Free Property Report