Last updated on 21st October 2021

Why it’s critical to sort out your home loan before November 1

As banks prepare to tighten their lending criteria, Home Loans Australia can help you beat the pinch.

Banks are tightening their lending criteria from November 1, so now is the time to refinance your mortgage or get your new home loan sorted. 

Home Loans Australia can still help you find the right home loan for you with rates as low as 1.85% (comparison rate 2.47%). But you need to act sooner rather than later.

  • APRA has announced new lending regulations will come into effect from November 1 
  • The maximum amount you can borrow based on your income and expenses may fall by around 5%*
  • At the same time, house prices in Melbourne and Sydney shot up between 15.6% and 26% in the 12 months to August**

Home Loan Australia’s lowest home loan rate is 1.85% (comparison rate 2.47%), but may not be available for much longer

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Time is running out to refinance your mortgage or get a new home loan as lenders look to tighten their borrowing criteria from November 1. 

APRA — Australia’s banking regulator — surprised many as it announced new, tougher serviceability tests for home loans. 

The new tests will mean banks will have to be sure new borrowers can potentially meet loan repayments on a home loan with an interest rate 3% higher*** than the actual rate they are signing up for.

This means that if you sign up for an interest rate of 2%, you’ll still have to show the banks you’re able to make repayments if it rises to 5%.

It’s to protect against rising levels of mortgage stress if interest rates go up. But it also means the maximum amount you can borrow based on your income and expenses may fall by around 5%* according to the ABC.

And that’s compounded by skyrocketing house prices — particularly in Melbourne and Sydney where house prices shot up between 15.6% and 26% in the 12 months to August**

That means, from November 1, you may be able to borrow less than you can now, but houses will likely cost more.

If you act fast, Home Loans Australia can still find a home loan with a low interest rate — whether you’re looking to refinance your mortgage or secure a new home loan. 

Our current lowest home loan rate is 1.85% (comparison rate 2.47%). But these low rates may not be available for much longer as banks tighten up their lending criteria. 

Home Loans Australia compares over 40 lenders across Australia. Our specialists can match you to a lender that fits your needs, deposit and budget, and we can move quickly before APRA’s new lending criteria changes the game.

What are you waiting for? Find a home loan with a competitive interest rate and save time and money.

This article is opinion only and should not be taken as medical or financial advice. Check with a financial professional before making any decisions.

* ABC, APRA tightens home loans on the same day New Zealand’s Reserve Bank lifts interest rates, published 6th October 2021.

** Sydney Morning Herald, CBA boss ‘increasingly concerned’ with rising property prices, published 23rd September, 2021.

*** The Guardian, Banks given new borrowing rule as Australian housing prices soar, published 6th October, 2021.