The Reserve Bank has maintained the cash rate, providing a sense of stability for borrowers.
However, the bigger story is the continued shift in lender policies and servicing rules.
Lenders have started applying more conservative servicing assessments. These include higher- assumed living costs and ongoing rate buffers. This can reduce borrowing capacity – even when interest rates are steady.
Another key change is how negative gearing is now being treated.
Some lenders are reducing the benefit of rental losses in income assessments – and that can impact how much investors are able to borrow.
The result is a widening gap between lenders, with borrowing power varying significantly depending on policy.
If you are in the market, it is a vital time to reassess your lending eligibility and options through an experienced broker.
You should also review tax strategies with your accountant.
Matt Punter, Director, Punters Finance and TSC Mortgage Brokers, puntersfinance.com.au and thesavingscentre.com.au.
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