The Finance Brokers Association of Australasia (FBAA) has disputed the claim by APRA chair John Lonsdale that “the current level of the buffer rate has not been restrictive on new credit to the household sector”, made to justify regulator’s decision on Wednesday to retain the 3 per cent buffer.

FBAA managing director Peter White AM said the comments aren’t consistent with the association’s research that found reducing the serviceability buffer by 0.5 per cent could boost borrowing capacity by $276 billion nationally.

“We welcome APRA’s decision to review the serviceability buffer more regularly, which is what we’ve been calling for, but see this decision as a missed opportunity to widen the path to homeownership for more Australians.”

Mr White said research commissioned by the FBAA and conducted by global research consultancy CoreData, found that a reduction of the buffer rate by 0.5 per cent would mean that around 270,000 more people could access median home loans.

The research also showed that almost 400,000 first home buyers aged between 25 and 34 would benefit, with those using a five per cent deposit seeing the greatest access gains for loans under $900,000.

“This small reduction would unlock loans for borrowers we know can afford to service them,” he said.

“In the light of all this, it’s very difficult to accept APRA’s claim that credit continues to flow where it’s needed.”

He said the 3 per cent buffer was also “forcing thousands of Australians to remain in ‘mortgage prison’ leaving them unable to refinance loans for a lower rate, despite them having proven their ability to service a loan at a higher rate.

Mr White said that he will be bringing the issue up again directly with senior government ministers.