APRA will Change Loan Serviceability Floor
By Sophia Rodrigues
Published On 31 Jan 2019 , 06:33 AMGiven there isn't any other quantitative restriction with respect to macroprudential policy for housing market that APRA can ease, I always felt lowering the 7% floor for calculating loan serviceability would likely be the next option they would consider. I am therefore pleased to see Macquarie's Justin Fabo write about in a research note. The outlook for RBA monpol has changed. There's as much chance of steady cash rate for longer as there is of a cut, which means hike is a long way off. So it makes no sense having 7% floor because it would take a few years -- if at all -- for mortgage rates to reach that level. All APRA has to do is reduce the floor to 6.5% and leave it up to banks and their lending standards to decide if 6.5% is appropriate or slightly higher, depending on individual circumstances. Will they do this? There's a good chance they will.
LATEST SNIPPETS
RBA buys A$500m govt bonds, mostly Nov 2027
The RBA bought A$500 million of April 2027 to November 2028 government bonds, focusing 65% of the purchase on the Nov...
Published on : 04 May 2020 , 04:19 PMRBA buying April 2027-Nov 2028 bonds
After pausing on Thursday, the RBA is back to buying government bonds via auction. The RBA is buying A$500 million of...
Published on : 04 May 2020 , 02:44 PMAOFM's run for strong demand at bond tender continues
The AOFM has sold A$1.5 billion of 3.25% April 2025 government bond at a weighted average yield of 0.3888%. ...
Published on : 04 May 2020 , 11:05 AMAOFM tenders next week total A$10.5B
The AOFM has announced the following tenders for next week, totaling A$5.5 billion of bonds and A$5.0 billi...
Published on : 01 May 2020 , 12:06 PMStrong demand for AOFM's 2024 tender; coverage 4.8 times
The AOFM has sold A$3.0 billion of 0.25% November 2024 government bond at a weighted average yield of 0.386...
Published on : 01 May 2020 , 11:06 AMRBA pauses for first time, No bond-buying auction today
For the first time since it began bond-buying via auctions, the RBA is not conducting any purchases today. Last week,...
Published on : 30 Apr 2020 , 12:03 PMHighlights of Australia Q1 CPI
Highlights of Australia Q1 CPI published by the Australian Bureau of Statistics Wednesday:
--Headline...
Published on : 29 Apr 2020 , 11:48 AMAOFM sells A$2.5B of 2032 bond but yld up, coverage down
The AOFM has sold A$2.5 billion of 1.25% May 2032 government bond at a weighted average yield of 1.0722%. T...
Published on : 28 Apr 2020 , 11:06 AMRBA buys A$500m bonds, total buying now A$49.3B
The RBA bought A$500 million of government bonds today, spreading its purchases across all the three bonds meeting it...
Published on : 27 Apr 2020 , 04:14 PMNo pause in RBA bond-buying yet
No pause yet in RBA's bond buying, with announcement today to buy A$500 million of government bonds maturing in t...
Published on : 27 Apr 2020 , 12:29 PM