REGULATOR TIGHTENS LENDING RULES FOR HIGHER-RISK LOANS

A key change to home lending is on the way – and it may influence how much some borrowers can access in 2026.

From 1 February, banks will be allowed to write no more than 20% of new mortgages at a debt-to-income (DTI) ratio of six times income or higher. Australia’s banking regulator, APRA, says lending standards remain sound, but it has seen an uptick in riskier applications and wants to act before housing-related vulnerabilities build up.

Who might feel the impact

• Borrowers stretching to the top of their budget.
• Higher-income earners buying in expensive markets.
• Investors or upgraders juggling multiple loans.

Rather than reducing borrowing power for everyone, the change will mostly affect applications at the high end of what a bank is comfortable with. Each lender will respond differently – some may tighten maximum borrowing, others may tweak their calculators or take a closer look at higher DTI applications.

If you are planning to buy or refinance and want to see how these settings could affect your borrowing options, I can compare lenders and help you find a workable path forward.

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