A federal inquiry into home lending is expected to recommend easing restrictions to allow first home buyers to borrow more. It will suggest the banking regulator be given a new mandate to consider the plight of borrowers when setting policies about how much banks can loan out.
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00:00As you can see, the interest rates are different.
00:04George Samios says it's become harder to write home loans for first home buyers.
00:09Lending rules require him to assess a person's ability to repay a loan at a higher rate.
00:14Even though the interest rate is 6.1 per cent, the bank will be assessing you at 9.1 per
00:19cent because of the 3 per cent buffer.
00:21That means sometimes people miss out on finance.
00:25It's just keeping the people in the rental cycle, paying someone else's mortgage and
00:28it makes them feel quite frustrated.
00:31Liberal Senator Andrew Bragg says it's time to ease lending rules.
00:35An inquiry he's chairing is expected to suggest that when people buy their first home, they
00:39get assessed with a lower buffer.
00:42The Australian dream can be restored by using some targeted demand side measures, which
00:48allow Australians to borrow more or get a loan if they are a first home buyer.
00:54Labor and Greens Senator Barbara Pocock are against lowering the buffer, arguing regulator
01:00APRA wants it to stay where it is and that easing it could increase the risk that people
01:05default on home loans.
01:07We shouldn't make it easier for first home buyers to get more debt.
01:12Increase supply, support those first home buyers in a market where the prices are not
01:16increasing, and take some of the investment heat out of it by changing the tax policy
01:22and building more public housing.
01:24Currently banking watchdog APRA aims to protect financial stability by focusing on whether
01:29lenders are taking on too many risky loans.
01:32The Senate inquiry is expected to suggest a new mandate that would require it to consider
01:37the plight of borrowers when setting policies.
01:40APRA would be hauled in to Canberra four or five times a year to go through how they're
01:46actually going about their business because we think that the way that mortgage rules
01:50are set is very important to Australians.
01:54And for many Australians still fighting to break into the property market.