APRA tightens rules on home loans
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This will happenmore and more, they don't want us owning property!
REA Group economist Anne Flaherty says she believes first home buyers are one of the groups most likely to be impacted by APRA’s tightening of its home loan rules.
“What APRA’s done is that they’ve increased that interest rate buffer,” Ms Flaherty told Sky News Australia.
“When a bank decides how much to lend to someone, they take into account how much would that person be able to repay if interest rates were increased by two and a half per cent.
“Now, what APRA’s done has risen that to three per cent, so I don’t think this will have too much of an impact on prices.”
She said the move is essentially reducing borrowing capacity by about five per cent.
“But we know that 92 per cent of borrowers, according to Commonwealth Bank, don’t borrow that maximum amount anyway.
“The people who are most likely to borrow at that high level tend to be people like first home buyers who are more constrained by what they are able to borrow.”
REA Group economist Anne Flaherty says she believes first home buyers are one of the groups most likely to be impacted by APRA’s tightening of its home loan rules.
“What APRA’s done is that they’ve increased that interest rate buffer,” Ms Flaherty told Sky News Australia.
“When a bank decides how much to lend to someone, they take into account how much would that person be able to repay if interest rates were increased by two and a half per cent.
“Now, what APRA’s done has risen that to three per cent, so I don’t think this will have too much of an impact on prices.”
She said the move is essentially reducing borrowing capacity by about five per cent.
“But we know that 92 per cent of borrowers, according to Commonwealth Bank, don’t borrow that maximum amount anyway.
“The people who are most likely to borrow at that high level tend to be people like first home buyers who are more constrained by what they are able to borrow.”