home loan crackdown

Australia’s most famous mortgage broker reveals the winners and losers in the home loan crackdown

PHOTO: Aussie Home Loans founder John Symond (pictured with wife Amber) 

  • Australian Prudential Regulation Authority cracking down on home loan rules
  • Banks now have to assess if borrower can cope with 3 percentage point rate rise
  • Aussie Home Loans founder John Symond said first-home buyers would suffer 

First-home buyers will be the big losers in the latest lending crackdown, Australia’s most famous mortgage broker fears.

With property prices across the country rising by a staggering 20 per cent a year, the Australian Prudential Regulation Authority is making banks assess if borrowers could cope with rising interest rates.

The banks are now offering mortgage rates of 2 per cent, but under the banking regulator’s new rules, lenders will have to determine if a prospective borrower could cope with mortgage rates rising by 3 percentage points to 5 per cent.

Winners and losers from loan crackdown

LOSERS 

FIRST-HOME BUYERS: They will have a harder time getting loan approval from a bank as prices keep rising

INVESTORS: They will have more hurdles getting a loan to cash in on rising real estate values

WINNERS 

EXISTING HOME OWNERS: Banks already required to stress test a 2.5 percentage point increase in mortgage rates and new rules will see that increased to 3 percentage points

This would be unlikely to cause house prices to drop if owner-occupiers continue to relocate for lifestyle

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