Government changes how your borrowing capacity is calculated

Recently, lenders have changed the way they calculate borrowing capacity for home loans.

We’ve broken down what the changes are and what they could mean for you.

What’s changed?
On 6 October the Australian Prudential Regulation Authority (APRA) announced that lenders need to assess borrowers’ ability to meet their loan repayment at an interest rate that is at least 3.0 percentage points above the loan product rate. An increase from the previous 2.5 percentage points.

Why has it changed?

The change was in response to concern about the speed of growth within the Australian property market, continuing record low interest rates that can only go north eventually, and an increasing number of Australians borrowing more.

What does it mean for you?

Home Borrowers
The amount you can borrow may be affected by this new legislation. Speak with Fornaro today to understand the potential impact to your current plans and borrowing capacity.

Have a pre-approval already in place
If you already have a pre-approval for a loan, it could mean that your pre-approval will be reassessed by the lender. It is best to speak with Fornaro today to understand the potential impact on your borrowing capacity.

What should you do?
Speak to Fornaro today.

  • Discuss your current pre-approval
  • Discuss the impact of the changes on your ability to borrow for your new home or investment
  • Discuss property plans and how we can work together to help you get there