APRA’s information paper did not say if the regulator would take further action, but it did describe the types of policy tools it could use, and what would prompt it to act.
It said banks should ensure they were able to put the brakes on loans with high debt-to-income ratios; loans with high loan-to-valuation ratios; and investor and interest-only loans.The paper also said APRA could make further changes to its “serviceability buffer,” which banks add on to a loan’s interest rate when assessing a new customer. The buffer was last month raised from 2.
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