Roddy, your inability to comprehend news articles is just one of the reasons why you've been miscalling the housing market for a decade.
It's common knowledge (among those who understand the housing market) that the mortgage assessment rate is above 7%. Has been since at least 2014.
Yes mother cat.
Rastus2
25 Oct 2016, 12:05 PM
My most recent loans had a stress test of 7 or 8 % I believe... if it went to 7%, my IP would become only just negative geared :c)
Yes, 7% is kind of a "floor". APRA's revision is as follows:
Prudent serviceability policies should incorporate a minimum floor assessment interest rate of at least seven per cent. Again, a prudent ADI would implement a minimum floor rate comfortably above this.
The bigger question is what would cause rates to go to 7%, and in that circumstance what would wage growth be at?
The vast majority of Australian Mortgage Holders have lived through 2007 - 2008 where the cash rate lived over 7% and the variable rate for many touched 10%. The stress test has been applied and passed in Australia in very recent memory.
Best to ask APRA that question if you want a well considered answer.
I suspect the idea of a 'stress test' is to cover multiple difficult circumstances... 7% Interest Rates is a simple way to stress test rather than throw heaps of possible variables into an equation.
The vast number of people had not known, or forgotten about the Brisbane Floods of the 1800's, however that did not stop them from happening again in the 1970's, and again more recently.
Dear me roddy, even Rastus knows you f***ed this one up!
Not me Roddy. The revisions are those of APRA. Get mother cat to drive you down to their offices in the van and you can shout at them from the rear window.
Seems a bit far fetched to me, but the good people at APRA think it's a pretty good benchmark to "stress test" the suburbanites and recommend that the banks develop their risk profiles for borrowers accordingly.
Has been happening for years. ING for example have never dropped below 8% for stress testing. Other ADI's range from 7.15% to 8% but most are in the 7.15% to 7.55% range.
I also deal with a few non-ADI's who are not really under the APRA umbrella, but even they are sticking to the 7% floor in their assessments.
I read an APRA report yesterday and my take was they will introduce larger buffers into investment rental income. That's what they seemed to be aiming for.
Take risks - if you win you will become wealthy, if you lose you will become wise
"The truth is that there are no good men, or bad men. It is the deeds that have goodness or badness in them. There are good deeds, and bad deeds. Men are just men."
Has been happening for years. ING for example have never dropped below 8% for stress testing. Other ADI's range from 7.15% to 8% but most are in the 7.15% to 7.55% range.
I also deal with a few non-ADI's who are not really under the APRA umbrella, but even they are sticking to the 7% floor in their assessments.
I read an APRA report yesterday and my take was they will introduce larger buffers into investment rental income. That's what they seemed to be aiming for.
You're welcome to read APRA's revisions. They're all there, nicely tracked and highlighted.
Khaderbhai
25 Oct 2016, 06:49 PM
Yes Roddy. You.
No association with APRA mother cat. Like I said, you can take it to APRA directly. Take the van down there and operate Roddy from the window while you hide out of sight.
The bigger question is what would cause rates to go to 7%, and in that circumstance what would wage growth be at?
The vast majority of Australian Mortgage Holders have lived through 2007 - 2008 where the cash rate lived over 7% and the variable rate for many touched 10%. The stress test has been applied and passed in Australia in very recent memory.
An obvious repricing of Risk. An increase in wage growth would be a big assumption.....
The Debt Levels are at Record Highs and IR's at Record Lows.
You're welcome to read APRA's revisions. They're all there, nicely tracked and highlighted. No association with APRA mother cat. Like I said, you can take it to APRA directly. Take the van down there and operate Roddy from the window while you hide out of sight.
You appear to have gone off on a tangent again Roddy.
"The truth is that there are no good men, or bad men. It is the deeds that have goodness or badness in them. There are good deeds, and bad deeds. Men are just men."
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