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After a tough couple of years for individual clients looking to access finance, a spate of popular lenders has changed their loan serviceability terms in response to guidance from the banking regulator.
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Spate of lenders loosen loan terms for new applicants
24 July 2019
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Earlier this month, APRA released guidance which said Australian lenders can decide their own interest rate floors for loan serviceability. Previously, APRA set its own benchmarks at around 7 per cent.
Lenders, including the major banks, have responded by dropping their interest rate floors.
Drops so far
- Bendigo and Adelaide Bank has cut its interest rate floor from 7.35 per cent to 5.75 per cent.
- The Bank of Sydney has reduced its interest rate floor to 5.85 per cent.
- ANZ has reduced its interest rate floor to 5.5 per cent.
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- NAB has reduced its interest rate floor to 5.5 per cent.
- Westpac has reduced its interest rate floor to 5.75 per cent.
- CBA has reduced its interest rate floor to 5.75 per cent.
- Macquarie has reduced its interest rate floor to 5.3 per cent.
- Suncorp has reduced its interest rate floor to 5.3 per cent.
The road to 2019
Securing finance has been a tough ask for individuals in recent years, particularly before APRA lifted its restrictions on investor loans in January.
One client segment which really felt the pinch were SMSF clients with off-the-plan property purchases.
“In some cases, clients have ended up being more out of pocket… or they don’t lose money, but they forgo opportunity,” said H&R Block SMSF director Kimberlee Brown when APRA’s restrictions were in place.
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