Powered by MOMENTUM MEDIA
SUBSCRIBE TO OUR NEWSLETTER SIGN UP
Powered by MOMENTUM MEDIA

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

Genworth revises serviceability calculator

genworth  genworth
Reporter 4 minute read

The mortgage insurer has updated its serviceability calculator to reflect a lower interest rate floor.

LMI provider Genworth Mortgage Insurance has reduced its interest rate floor for home loan serviceability assessments from 5.75 per cent to 5.4 per cent, effective from 11 November.

Genworth’s revision comes less than a week after the Commonwealth Bank of Australia (CBA) announced that it would also lower its rate floor from 5.75 per cent to 5.4 per cent.

Genworth and CBA have joined Auwside BankHeritage Bank and Westpac in revising their serviceability rates twice in response to the Australian Prudential Regulation Authority’s (APRA) changes to its home lending guidance.

Advertisement
Advertisement

In early July, the prudential regulator scrapped its requirement for a 7 per cent interest rate floor and raised its recommended buffer rate from a minimum of 2 per cent to 2.5 per cent.

APRA chair Wayne Byres said the regulator’s amendments were “appropriately calibrated”, stating that a serviceability floor of more than 7 per cent was “higher than necessary for ADIs to maintain sound lending standards”.

Analysts have partly attributed the rebound in home lending activity over the past few months to APRA’s changes.

According to new data released by the Australian Bureau of Statistics, the value of new home lending commitments rose 1.1 per cent (in seasonally adjusted terms) in September, following on from a 3.8 per cent rise in August.

New lending commitments are now up 5.6 per cent (seasonally adjusted) when compared with September 2018, the first positive year-on-year result seen since mid-2018.

PROMOTED CONTENT


[Related: Auswide slashes floor rate]

Genworth revises serviceability calculator
genworth
TheAdviser logo

The not-to-be-missed Accountants Daily Strategy Day will travel through Melbourne and Sydney in August to equip accounting professionals with the latest industry updates and tips for modern practice management as well as the latest cutting-edge technology, processes, strategies and trends shaping the future of accounting. Visit the website for more information: www.accountantsdaily.com.au/strategy-day

genworth

 

more from the adviser
David Hyman

Breaking News

Brokers promote competition in lending: Lendi

Brokers are driving competition in the mortgages sector and chang...

money au ta

Breaking News

SME fintech closes $25m raise to fund expansion

An SME lender has raised $25 million in equity to fund the ‘rap...

loan application

Breaking News

Hot Property: The biggest property headlines from the week 26 to 30 July

The weekly round-up of the biggest news stories from across Momen...