This week in banking - APRA suggests loosening home loan criteria

Niko Iliakis

Friday 24 May 2019

In this week’s banking recap, we look at some biggest news across the Australian banking landscape, including the 2019 Mozo People’s Choice Awards.

The Mozo People's Choice Award winners announced

This year marks the tenth annual Mozo People’s choice Awards, and to celebrate we decided to introduce awards for household services which are increasingly becoming fixtures in Aussie budgets.

Along with our usual finance category, this year’s awards considered things like movie and TV streaming, supermarkets, online grocery shopping, and NBN plans. Take a look to see if your favourite providers made the cut.

APRA eases home loan assessment criteria

This week, APRA proposed a loosening of current home loan serviceability assessments, potentially opening the door to scores of first home buyers.

Since 2014, banks have had to factor in borrowers’ ability to make repayments in the case of a rate hike, with rates of 7% typically serving as the minimum.

But with interest rates at record lows - and signs they’ll drop even further in the coming months - APRA has made the case that a floor of 7% might be needlessly high.

Their new proposal will allow banks to bring the rate floor down so it’s not so at odds with the current interest rate environment. But Mozo Data Manager Peter Marshall reminds us that those buffers serve an important purpose.

“Borrowers need to think seriously about what they’re getting into - you need to know whether you’re able to keep up with your repayments if rates rose or if your circumstances changed.”

NAB and UBank come around, add Apple Pay

NAB customers lamenting the bank’s incompatibility with Apple Pay won’t have to fret any longer. On Tuesday, the big bank - along with its subsidiary UBank - announced it will finally be adopting the popular payment platform.

This makes NAB the third of the Big 4 banks to support Apple Pay, with Westpac currently the sole holdout. 

Life insurance a ‘no-go’ topic for Aussies

Is it any surprise that life insurance is one of people’s least favourite conversation topics? A report from life insurer Integrity found that discussing what to do about money after the death of a partner ranks among the top three most uncomfortable topics for Australians.

Young Aussies were most likely to steer clear of the topic, with 46% considering the topic a ‘no-go’ area. But Mozo Director Kirsty Lamont urged Australians to overcome their aversion.

“Once you start making major financial commitments like buying a house or starting a family it’s worth looking into a policy.  It’s probably not as expensive as you think, and could be crucial in an unfortunate situation.”

So if you think it’s about time you took a look at some of the life insurance policies available, our insurance page is a good place to start.

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