00:00Some of the main recommendations are really around helping first home buyers get easier
00:08access to finance. And at the moment there's something called a mortgage serviceability
00:13buffer. So when you go to a bank and they offer you a variable interest rate, say that
00:17variable interest rate is 6%, the buffer is currently set at 3%. So the bank will assess
00:24you on your ability to repay the loan at 9%. So that's 6% plus 3%. 9% is the rate they
00:31assess you at. This inquiry is saying that serviceability buffer is too high. It's stopping
00:36first home buyers being able to get a loan. And so we should reduce that buffer. Now of
00:42course, APRA came out this week and said we should leave the buffer where it is. But this
00:47is likely to be what the inquiry calls for. And it's also likely to be the coalition's
00:54housing policy going into the federal election.
00:56Anasim, what are the arguments against easing lending rules?
01:01So the argument that APRA put and a lot of consumer groups had put to the inquiry is
01:08that the current buffer is good where it is. It's there to protect against risk in the
01:14system that is vulnerable Australians taking on too much debt. And we know interest rates
01:19have risen. We know that there are a lot of people already in mortgage hardship. And so
01:24their view is that this just increases too much risk in the system and leaves people
01:29more vulnerable to taking on too much debt and potentially then losing their homes.
01:34And are any other changes expected?
01:37Yes, so the inquiry is expected to make a number of recommendations. Another one will
01:43relate to APRA's mandate. So APRA currently has a mandate to protect financial stability
01:52and it focuses on the banks and the risks that banks take on. But it doesn't really
01:57look at first home buyers and their own home ownership prospects. So the inquiry is likely
02:03to look at that issue and whether the mandate needs to be updated. And there's also been
02:07suggestions to this inquiry about having co-ownership, co-home ownership models so
02:13that if you want to go in with a relative or a friend, the banks can make that possible
02:19for you and that will ease the burden potentially for first home buyers.
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