APRA adds 14pc to Borrower Firepower

The economy is poised to receive a triple whammy of policy stimulus in a single week following a second consecutive rate cut, passage of the federal government’s $158 billion tax plan and the removal of a key handbrake on home lending. Australian Prudential Regulation Authority chairman Wayne Byres announced its decision to scrap the 7 per cent serviceability floor on borrowers effective immediately in a move that is expected to increase borrowing capacity by up to 14 per cent. Analysis by UBS shows that a couple earning a combined $200,000 with two children paying a comparison rate of 3.5 per cent will have an additional $150,000 borrowing capacity. Mr Byres said after careful consideration


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