RBA urges banks to keep lending standards high
25/6/2021
Reserve Bank of Australia (RBA) governor Philip Lowe has reminded banks they need to continue rigorously assessing home loan applications.
What, exactly, are ‘high lending standards’? Well, it can differ from lender to lender, but it's based on three core factors:
“It is important that lending standards remain sound in an environment of low interest rates and rising housing prices,” he said in a recent speech.
“The RBA does not, and should not, target housing prices. We do, though, have a strong interest in trends in household borrowing, especially given the already high level of household debt in Australia".
Where it gets tricky is that different lenders assess those factors differently, and so reach different conclusions on who they lend to. As a mortgage broker, I can give you expert advice on which lender would best suit your personal circumstances.
