APRA Announces New Lending Changes: What It Means for Borrowers and Investors

APRA (the Australian Prudential Regulation Authority) has recently announced upcoming changes to home loan lending rules, and while most borrowers won’t be directly affected, it’s important to understand what’s changing, especially if you’re planning to borrow or invest before 2026.

What’s Changing?

From 1 February 2026, APRA will introduce a new cap on the number of “high-debt” home loans that lenders can approve. Specifically, banks will be limited in how many loans they can issue where a borrower’s debt-to-income (DTI) ratio exceeds 6×.

A DTI of 6× simply means your total debt is more than six times your annual income.

Who Might Be Affected?

These changes mainly impact:

· Investors, who more commonly borrow at higher DTIs

· Borrowers seeking large loan amounts relative to income

· Clients planning purchases or refinances that involve complex loan structures

Most everyday home buyers fall below a 6× DTI, meaning most people won’t see any major change.

Why Is APRA Introducing This?

APRA’s aim is to keep Australia’s financial system stable. Recently, high-DTI lending has grown, particularly in the investor segment, as interest rates stabilise and property values rise. By placing a limit now, APRA hopes to reduce long-term financial risk and keep lending practices sustainable.

What Should Borrowers Do Now?

If you’re planning to buy, refinance, or invest, especially if you rely on higher borrowing capacity. It’s smart to review your position early as lenders may begin adjusting their credit policies ahead of the February 2026 start date.

We’re Here to Help

As always, we keep across every change from APRA, ASIC and each lender, so we can guide you with clear, up-to-date advice. If you'd like to understand how these changes may affect your borrowing power or future plans, reach out anytime, we’re here to help.