The definition of “near term” will be the focus of consultation between the banks and APRA, but it is expected lenders will make their own judgments based on the individual circumstances of customers.
In another move aimed at increasing credit to younger home buyers, APRA will drop the requirement that HELP debts are included in the debt-to-income ratio for a potential mortgage.
Debt-to-income ratios of above six – where a person is borrowing more than six times their annual income – are considered risky and generally restricted. By excluding HELP debt from overall debt, home buyers will be able to borrow more.
A graduate earning $100,000 with a $60,000 HELP debt could borrow up to $540,000 under a debt-to-income ratio of six. With…
