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APRA clarifies stance on interest rate buffers

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Australian Broker | 25 Oct 2016, 07:00 AM Agree 0
The regulator has also shed light on serviceability and questioned the use of tests such as the Henderson Poverty Index
  • Really? | 25 Oct 2016, 10:11 AM Agree 0
    ROFL - where have they been for the past 10 years?
    2% buffer etc has been in place for decades; yet they announce it like they've come up with something revolutionary.
    They really need to get out from behind the desk, and speak to some people at the coalface.
  • Papery | 25 Oct 2016, 10:33 AM Agree 0
    WTF....!!!!! I think the SKY IS FALLING......AGAIN!!!!
    Most Lender DSR serviceability hurdles are MORE than 2%.....some by as much as 4% & don't get me started on the additional buffering they load to existing debt.

    And what about all the income that is classified as NOT ASSESSABLE.....

    And what was the Australian arrears/default rate again??

    • DB | 29 Oct 2016, 03:55 PM Agree 0
      Well said!!!
      Someone please inform me when the interest rates were last at 7.5% / 8%?? It would be more than 10 years ago and APRA seem to think the sky is falling in and we are going to get similar rates again, a property bust and more!! I am not an economist however it will be well over 10 years again before they get close to 8% if ever! ING are offering a 5 year fixed at 3.94% so arent we expecting rates to be steady over this time? Generally speaking if the Reserve Bank has to increase rates it means people are spending in the economy and wages growth has likely increased. Someone from APRA please explain to me where the doom and gloom is!
      Surely its about time for the banks to speak out and put APRA back in there place. Where was APRA 10 to 15 years ago? Nowhere and we have had a financial crisis and the banks are the strongest in the world so why are they dictating too them now?
  • Broker | 25 Oct 2016, 01:28 PM Agree 0
    It is frightening how clueless to the reality APRA really are , most lenders use a servicing rate of 7%-8% and have done for ages , how could they not know that, where have they been?

    I pray that the same geniuses are not employed at ASIC, otherwise we could be in real trouble.
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