If you’ve ever wondered what mortgage broking and TikTok have in common, recent headlines prove the answer is now everything apparently.
With social media everywhere, it seems even brokers are tempted to try their hand at online fame. But now it seems, regulators are watching.
ASIC is sharpening it’s focus on how financial services are marketed on platforms like TikTok and Instagram. The regulator is reviewing it’s advertising guidance to make sure everyone is playing by the rules, and that even well meaning posts don’t mislead or confuse consumers.
In short, a viral video might grab attention, but if it strays into unclear or oversimplified financial advice, it could land a broker in hot water.
In this week’s newsletter, we look at changes that take effect tomorrow on lender debt to income rules and what it means for borrowers.
The Australian Prudential Regulation Authority (APRA) has introduced new debt-to-income (DTI) limits for home lending that start on 1 February 2026.
Rather than telling lenders exactly how to calculate serviceability, APRA is now setting macro-prudential guardrails to reduce future financial risk in the housing market.
Under these rules, banks and authorised deposit-taking institutions must ensure that no more than 20 % of their new home loans have a DTI ratio that is 6 times income or higher. Put simply, a borrower’s total debt can’t be more than six times their annual income if the loan is part of that 20 % slice of high-risk lending.
But Why?
APRA’s goal is to help keep the financial system stable by slowing the growth of high-risk lending, especially where borrowers take on large debts relative to their incomes. By limiting how much of this high-DTI lending banks can write, the regulator hopes to reduce the risk of widespread loan stress in a rising-rate or downturn scenario.
What will it mean for borrowers?
For most borrowers, especially those with conservative incomes and manageable debts, the change won’t directly alter how much they can borrow – banks still assess loans on individual serviceability and risk. However:
- Borrowers with very high DTI ratios (6× income or more) may find it harder to get approved because lenders can only approve a limited number of those loans.
- Investors and high-debt applicants could feel the squeeze first, as these profiles often push DTI ratios above 6×.
Imagine a borrower earning $100,000 a year. Under the APRA influence:
- A loan that leaves them with total debts of $600,000 or more puts them at a DTI of 6×.
- If too many new loans like this are written, a lender could hit its 20 % cap and become more selective — meaning potential delays or stricter scrutiny on applications at this level.
Key Takeaways
APRA’s DTI limits are not a hard cap on individual borrowers, but a market-wide limit on high-risk lending. For most borrowers with sensible debt levels, the impact will be limited — but high-debt applicants might see tighter credit conditions and more rigorous checks as lenders manage their exposure.
Variable
The rates below are based on a $500,000 loan, with the borrower making principle and interest payments with a loan term of 30 years. The rates quoted may vary depending on the borrowers LVR.
1 Year Fixed
The rates below are based on a $500,000 loan, with the borrower making principle and interest payments with a loan term of 30 years. The rates quoted may vary depending on the borrowers LVR. At the end of the three year fixed period, the borrowers interest rate will revert to a standard variable rate for the life of the loan.
