Australian Prudential Regulation Authority (APRA) recently changed legislation impacting Australia’s borrowing capacity when financing properties, amongst record-low interest rates.
Wisebuy Investment Group explains APRA is ‘strengthening residential mortgage lending assessments’ by increasing the buffer from 2.5% to 3.0% interest when testing lending amount against income.
The protection body is providing more comfort to everyday Australians by reducing risk and ensuring home-buyers can meet mortgage repayments for the duration of their mortgage repayment period, including, when interest rates increase post-pandemic-lows.
According to their data, the ‘rate of household credit growth is likely to exceed income growth for the foreseeable future.’ These changes to borrowing capacity protect both owner/occupiers from falling short in mortgage repayments.
It is important to note, these APRA changes will not impact mortgage interest rates, only the borrowing buffer. These new regulations are predicted to have a modest effect on the typical borrower’s borrowing capacity by 5 percent. Most borrowers do not take out loans to their maximum capacity; those that do, are generally investors as opposed to owners/occupiers.
Wisebuy Investment Group, welcome this change, insisting ‘low-rate home loans are just part of their award-winning property investment service’. Growing wealth through property investment requires a long-term strategy.
Wisebuy Investment Group advises now is a prudent time to consider refinancing as savings are likely to be lost if not taking advantage of historic interest lows. Their expert team, coupled with these extra borrowing capacity protections, will work with you to compare home loan products from over 60 lenders. Buying your first home can be a daunting experience which is why Wisebuy Investment Group explains the entire process.
This sentiment is supported by their exceptional client testimonials. Jack Mennie advocates during his time the requirements changed many times. ‘Wisebuy Investment Group was always ready to adapt and come up with new solutions.’
All in all, these borrowing capacity changes are positive for the Australian property market with APRA notifying they will consider additional measures if needed, particularly if housing prices refuse to cool.
Wisebuy Investment Group works to help people all over Australia climb the property ladder quickly and easily. Book a consultation with one of their expert staff today here.
Name: Brad East
Company: Wisebuy Investment Group
Email: [email protected]
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Release ID: 48215