First major amends rate floor

by Madison Utley12 Jul 2019

Australia's first major bank has amended its floor rate and sensitivity margin for retail lending, following APRA's revised guidance on serviceability assessments for residential mortgage applications.

Last week, the regulator announced that ADIs will now be able to review and set their own minimum interest rate floor and utilise a revised interest rate buffer of at least 2.5% over the loan’s interest rate.

ANZ has told brokers that as of 15 July, its current floor rate of 7.25% will be amended to 5.50% and the sensitivity margin will be changed from 2.25% to 2.50%.

The updated policy will apply to new applications lodged on or after the effective date and to applications that were declined or have expired and are resubmitted on or after 15 July.

ANZ was also the first of the big four to announce its response to both the June and July RBA cash rate cuts.