The Australian Banking Association says more people will be able to access the property market if the prudential regulator is more flexible.
The country’s prudential regulator should lower the interest rate test for first home buyers, the Australian Banking Association says, arguing it will boost borrowing capacity and allow more people to buy properties.
The so-called serviceability buffer – which forces banks to evaluate the borrowing capacity of a customer by adding 3 per cent to the advertised interest rate – should be cut for first home buyers, according to the lobby group for the country’s biggest banks. The National Australia Bank shares this view, although neither specify a level at which the serviceability buffer should be set.writes on banking, payments and fintech.
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