New research commissioned by an industry association has reportedly found that hundreds of thousands of Australians could access affordable home loans with a lowered serviceability buffer.
Research commissioned by the Finance Brokers Association of Australia (FBAA) and conducted by CoreData has found that lowering the 3 per cent serviceability buffer imposed by the Australian Prudential and Regulation Authority (APRA) to 2.5 per cent could result in a boost to borrowing capacity by $276 billion nationally.
According to the research, 268,862 more Australians could gain access to median home loans, excluding those limited by deposits. This would mean the required income needed to service a mortgage on the median home loan would drop from $74,332 to $70,662.
This would be particularly beneficial to younger buyers in the 25–34 age bracket, bringing 119,000 more potential buyers above the approval threshold, equating to a 12 per cent increase.