New analysis reveals that potential homebuyers could see a surge in their borrowing power if the Reserve Bank delivers three rate cuts. The cost of holding debt has increased, reducing borrowing power, but this trend is expected to reverse with rate cuts.
Potential homebuyers would see their borrowing power surge by tens of thousands of dollars if the Reserve Bank delivers just three rate cuts , new analysis has revealed. As the cost of holding debt has steadily increased under the RBA’s run of 13 rate hikes, the amount of credit banks can issue has fallen substantially, paring back the borrowing power of those seeking to purchase a home.
However, as the monetary tightening to date is unwound, this trend is set to be reversed, allowing mortgagors to take on greater liabilities. Borrowers will be able to purchase larger home loans when the Reserve Bank cuts interest rates. Picture: NCA NewsWire / David Swift According to analysis from financial comparison website Canstar, after just three 25 basis point rate cuts, owner-occupiers purchasing a mortgage would enjoy a significant boost in their borrowing powe
Homebuyers Borrowing Power Reserve Bank Rate Cuts Analysis
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