In response to the cash rate cut and adjustments from the banking regulator, there has been a spate of changes to the cost and serviceability terms of a mortgage in Australia.
As reported extensively on Smart Property Investment, the banking regulator has eased its guidelines on loan serviceability for Australia’s lenders.
The marketplace of lenders has largely reacted by dropping its interest rate floors, which means when a new application is lodged for a home loan, buyers will not be assessed on their ability to pay interest rates of up to 7 per cent. Rather, most lenders have dropped their expectations to around the 5.5 per cent mark.
Here’s what we know so far:
- The Bank of Sydney has reduced its interest floor rate to 5.85 per cent.
- ANZ has reduced its interest rate floor to 5.5 per cent.
- Westpac has reduced its interest rate floor to 5.75 per cent.
- CBA has reduced its interest rate floor to 5.75 per cent.
- Macquarie has reduced its interest rate floor to 5.3 per cent.
- Suncorp has reduced its interest rate floor to 5.3 per cent.
Other second-tier lenders, like AMP, have also advised sister title Mortgage Business that it is currently assessing its loan serviceability guidance.