Australia's bank regulator (APRA) has refused to budge on the 3% serviceability buffer, insisting it is crucial for financial stability.

Many banks and lobby groups have been advocating to lower the interest rate test for first home buyers, arguing it would allow more people to buy properties.

But APRA argue it's necessary to ensure borrowers can repay loans.

Director at Foster Ramsay Finance, Chris Foster-Ramsay spoke to Oly Peterson on Perth Live.

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