Broken record
Apologies if I've sound like a broken record in recent months, suggesting that mortgage rate buffers rather ought to reflect the mortgage rate plus 250 basis points.
A positive move from APRA means that a 250 basis points buffer may now be considered instead, pending a 4-week consultation (with the "comfortably above" prudential guidance removed for clarity).
This could allows monetary policy to transmit a bit better by not applying a uniform assessment rate, but also allowing plenty of interest rate buffer to minimise risky lending.
And it can make a difference, at the margin, for borrowers looking to enter the housing market too.
Good move, and I will go back to looking at other things too!
