ANZ Banking Group is the first lender to pass on the benefit of the loosened lending limits announced last week that are tipped to greatly increase purchasing power for homebuyers.

The Australian Prudential Regulation Authority (APRA) last Friday announced it would relax its rules that meant banks had to assess a borrower's ability to repay their mortgage if interest rates rose to 7 per cent.

Under the change in rules, banks would now only have to apply a 2.5 per cent “sensitivity margin” on current interest rates when assessing home loan eligibility.

On Thursday, ANZ told mortgage brokers it would lower its mortgage assessment floor to 5.5 per cent.