Cutting the serviceability buffer from 3% to 2.5% could lift national borrowing capacity by $276 billion, new FBAA research showed.

The study, conducted by global consultancy CoreData, found that around 270,000 more Australians could access median home loans, with almost 400,000 first-home buyers aged 25 to 34 standing to benefit—especially those using a 5% deposit for loans under $900,000.

“We’ve said for a very long time that this simple move would make a massive difference to the housing market because we are talking about people who can afford to service these loans,” said Peter White (pictured), FBAA managing director.

Calls to lower the buffer intensified after APRA decided late last year to retain the 3% mortgage serviceability buffer despite higher interest rates, a move that drew criticism from industry leaders.