Keep lending standards high, says RBA
Reserve Bank governor Philip Lowe has reminded banks they need to continue rigorously assessing home loan applications.
“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.”
“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.
What, exactly, are ‘high lending standards’? Well, it can differ from lender to lender, but it’s based on three core factors:
- Employment status and income
- Savings and credit history
- Existing loans and equity
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.
