Finance & Fury Podcast

Welcome to Finance and Fury Looks like borrowing for property purchase is going to be easier. APRA is looking to make some changes to lending criteria enforced onto the banks. Today: Run through what these changes are Why they are occurring What the lending environment looks like over the next few years What is happening with the RBA and borrowing restrictions from APRA? Interest rates are strongly related to the interbank cash rate Made it clear that they are cutting rates in 2 weeks’ time from 1.5% to 1.25% Banks lend at a margin slightly above the cash rate that covers their expenses, makes a profit and pays the deposit levy The cash rate of 1.5% and variable lending rates of around 3.75% leaves a 2.25% buffer But banks assess your borrowing capacity at an interest rate of 7% This is set by APRA, and they are going to remove the serviceability assessment at 7% Government plans: APRA has removed its quantitative guidance on the level of the serviceability floor rate at 7% Authorised Deposit-taking Inst