May 20, 2019 / 11:47 PM / a month ago

Australian regulator to ease assessment criteria on mortgage affordability

SYDNEY, May 21 (Reuters) - Australia’s prudential regulator on Tuesday proposed dropping requirements for banks to use a minimum 7% interest rate when assessing a borrower’s ability to service a loan, in a move it said would increase customers’ maximum borrowing capacity.

“Instead, authorised deposit institutions would be permitted to review and set their own minimum interest rate floor for use in serviceability assessments,” the Australian Prudential Regulation Authority (APRA) said in a statement. (Reporting by Paulina Duran; Editing by Sam Holmes)

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