Luke Speaks with Effie Zahos, Canstar’s Editor-at-Large and money expert, following the Australian Prudential Regulation Authority (APRA) publishing an update on its macroprudential policy settings, confirming its view that a 3% interest rate buffer it expects banks to use when assessing the serviceability of home loan applications remains appropriate to maintain prudent lending standards.

This serviceability buffer applies to all borrowers, both new-to-market buyers and existing borrowers trying to refinance their loans with an APRA-regulated lender.

This can limit existing borrowers trying to refinance to cut borrowing costs says Canstar.

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