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
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
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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