smart property investment logo

How APRA’s changes will affect everyday Aussies

By Cameron Micallef 29 August 2019 | 1 minute read

Investors are approximately $100,000 better off following the update to APRA’s serviceability floor for residential mortgages, new research has suggested.

Su-Lin Ong

The figures released by Dream Design Property showed that the removal of the 7 per cent floor and updating it to 2.5 per cent plus the loan’s interest rate meant that investors have more freedom in this low interest market.  

APRA chair Wayne Byres was quick to highlight that this is not a lessening of standards but a reaction to current market conditions.

“This updated guidance provides ADIs with greater flexibility to set their own serviceability floors while maintaining a measure of prudence through the application of an appropriate buffer that reflects the inherent uncertainty in credit assessment,” Mr Byres stated.

However, the founder of Dream Design Property, Zaki Ameer, was critical of APRA’s response following the official cash rate falling.


“They (APRA) need to be much quicker. They currently wait for the market to change and then react, versus changing with the market. Once the property market dropped and interest rates are low, they try to make investment lending easier in order to ramp up the market,” Mr Ameer said.

According to Dream Design Property, if an investor took out a mortgage at 3.3 per cent interest:

  • A single person who makes $120,000 can now borrow $859,000, which is up over $120,000 from $738,000.
  • A single person who makes $80,000 has extended their borrowing capacity by $81,000 from $498,000 to $579,000.
  • Similarly, for couples, if two adults make $120,000 each and have two children, the banks will lend them more than $200,000 more, with their maximum borrowing capacity being $1,667,000 up from $1,434,000.
  • A couple with no children, which both make $80,000, can now borrow $1,167,000, an increase on the previous maximum of $1,004,000.



Serviceability refers to the ability of a borrower to make repayments on a loan based on the loan amount, their income, and expenses which are factors being considered by financial institutions to approve the loan.

About the author

Cameron Micallef

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your... Read more

How APRA’s changes will affect everyday Aussies
Su-Lin Ong
spi logo

Get the latest news & updates

Join a community of over 100,000 property investors.

Check this box to receive podcast updates

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.