CBA follows Westpac by slashing stress test for refinancers.

CBA, Westpac start slashing refinancing mortgage buffers.

Moves by the two biggest home lenders to cut the serviceability buffers they apply to refinancing applications for quality borrowers is a sign the economy is heading towards peak interest rates – and that competition in the mortgage market remains intense.

In good news for those stuck in "mortgage prison", Australia’s biggest bank, CBA, has announced it will lower the stress test on select refinance applications from 3 percentage points to just 1 percentage point.

By the APRA guidelines, banks are required to subject all new mortgage applications, including refinancing, to stress tests.

But moves by our two biggest home lenders to cut the serviceability buffers they apply to borrowers wanting to refinance could be a sign that we're heading towards peak interest rates – and shows that competition in the mortgage market remains intense.