News / APRA reinforces sound residential mortgage lending practices /
APRA reinforces sound residential mortgage lending practices
11 December 2014
The Australian Prudential Regulation Authority (APRA) has warned authorised deposit-taking institutions (ADIs) that it will be closely monitoring lending practices in response to the current mortgage lending environment.
Low interest rates, increased levels of household debt, competition in the housing market and credit growth are factors that have contributed to APRA's concern regarding the maintaining of lending integrity in the industry
Particular attention will be paid to a number of issues relating to sound residential mortgage lending practices including higher risk mortgage lending and loan affordability for new borrowers.
APRA supervisors will instigate the review of ADI's lending practices in the first quarter of 2015. If a lender is not demonstrating a prudent approach to the provision of their services further supervisory action may be taken and an increase in capital requirements could be demanded.
For more information please contact:
Paul Lutvey | Partner
t +61 7 3224 0240
f +61 7 3224 0333