There were mixed reactions to the Australian Prudential Regulation Authority's announcement yesterday that it planned to drop the requirement for the application of a 7 per cent floor from mortgage serviceability assessments.While one commentator described the change as a "game changer" for home buyers, another said its impact would be negated by other changes to lending standards.In the latest move to relax mortgage lending rules it introduced in 2014 and 2017, APRA wrote to ADIs saying it had begun consulting on "possible revisions" to its guidance on mortgage serviceability assessments.It says that instead of the 7 per cent floor (which is 7.25 per cent in practice), ADIs would be permitted to review and set their own minimum interest rate floor for use in assessments.However, it wants lenders to increase the interest rate buffers they use in their assessments from 2.25 per cent to 2.5 per cent.The 7 per cent rule has been in place since December 2014, when APRA also introduced the interest rate buffer and the 10 per cent limit on growth in new lending to investors.In March 2017, APRA said it expected ADIs to limit the flow of new interest-only lending to 30 per cent of new residential mortgage lending. It also told ADIs to place "strict internal limits" on the volume of interest-only lending at loan-to- valuation ratios above 80 per cent, and "ensure there is strong scrutiny and justification" for interest-only loans at LVRs above 90 per cent.In April last year, APRA started to ease the restraints. It removed the investor loan growth benchmark, although the change would only apply to ADIs that had "contained their growth and are able to provide assurance on the strength of their lending standards."In December, it removed the interest-only benchmark (with effect from 1 January), again with a caveat that ADIs needed to confirm lending policies and practices that met APRA's expectations.APRA chair Wayne Byres said in yesterday's letter to ADIs that the operating environment for ADIs had evolved since 2014, prompting APRA to review the ongoing appropriateness of the current guidance.Byres said: "APRA introduced the guidance as part of a suite of measures designed to reinforce residential lending standards at a time of heightened risk. Although many of those risk factors remain - high house prices, low interest rates, high household debt and subdued income growth - two more recent development have led us to review the appropriateness of the interest rate floor."With interest rates at record lows and likely to remain at historically low levels for some time, the gap between the 7 per cent floor and actual rates paid has become quite wide in some cases."In addition, the introduction of differential pricing in recent years -  with a substantial gap emerging between interest rates for owner-occupiers with principal and interest loans on the one hand, and investors with interest-only loans on the other - has meant that the merits of a single floor rate across all products have substantially reduced."CoreLogic research analyst Cameron Kusher said the likely