APRA publishes letter to banks on exceptions to home lending standards

The Australian Prudential Regulation Authority (APRA) has written to banks to reiterate its expectations around managing exceptions to housing lending policy.

Today’s letter follows recent changes by some banks to their processes for granting exceptions to borrowers who don’t meet minimum home loan serviceability criteria, such as the 3 per cent serviceability buffer.

The intent of the letter is to reinforce to banks the importance of ensuring exceptions to policy are prudent, limited and clearly justified so as not to undermine the core intent of APRA’s guidance on credit risk management.

The letter is available on the APRA website at: Housing lending standards - Reinforcing guidance on exceptions