Banks say lower lending criteria will get more people into first homes as others raise debt fears

Chris Taylor, the chief of policy at Australia Banking Association, says reducing 3% serviceability buffer could help first home buyers enter property market

• Follow our Australia news live blog for latest updates
• Get our breaking news email, free app or daily news podcast

Consumer rights groups have warned against calls to lower the interest rate test for first home buyers, describing it as a lazy policy idea" that puts all the risk on people who can least afford to manage it.

On Thursday the Australian banking lobby told the Senate inquiry into financial regulatory framework and home ownership that greater flexibility assessing applicants could help more people safely access credit.

Sign up for Guardian Australia's breaking news email