Overview
Prudential Practice Guide APG 223 provides practical guidance for authorized deposit-taking institutions (ADIs) on sound risk management practices related to residential mortgage lending. The guide emphasizes the importance of prudent decision-making in areas such as borrower serviceability assessments and the application of buffer and floor rates. It also includes updates to reflect changes in market conditions and regulatory requirements. APRA's revisions to APG 223 have been made over multiple rounds of industry consultations, with the final version released in July 2019. The latest revisions focus on improving the robustness of credit risk assessment to mitigate potential risks arising from economic fluctuations and unsound lending practices.