Home buyers are set to receive a borrowing boost in the order of $100,000 because of expected changes to lending standards and interest rates, new modelling shows.
A single borrower with an annual income of $80,000, no other debts and average living expenses could today expect to be approved for a maximum loan of $512,000.
This would increase to $567,000 under the proposed relaxation of loan serviceability rules flagged by APRA, according to modelling by Independent Mortgage Planners. It would increase again to $598,000 if the Reserve Bank reduces the official interest rate.
Mortgage broker Louise Lucas of The Property Education Company says the industry expects significant changes to be in place by mid-June after APRA has consulted with the lending sector about the new assessment levels.
The major banks currently assess borrowers at 7.25% but the new assessment level is likely to be less than 6%, Lucas says.