On 1 February 2026, the Australian Prudential Regulation Authority (APRA) introduced new limits on how much high‑debt lending banks can do.[1] In simple terms, only a portion of new loans can now go to borrowers whose total debt is six times their income or more. Most Australians borrow well below this level, so the majority of borrowers won’t be affected by the change.
Some loans – like those for newly built homes or short‑term bridging finance – are exempt from the cap. Existing mortgages also remain unaffected.
APRA’s aim is to keep the financial system on steady ground as household debt and housing credit have continued to rise.[2] High debt‑to‑income loans can work for some people, but when too many build up at once, the whole system becomes more sensitive to economic shifts. So these limits are simply about keeping lending sustainable and supporting long‑term stability.
If your debt‑to‑income ratio is under six (meaning you are looking to borrow less than six times your annual income), you’re unlikely to notice any difference. If it’s higher, you may still be able to borrow, but you may find banks are more selective because they have less room for these types of loans.
Overall, this change is about long‑term stability, not restricting opportunity. But understanding where you sit can help you plan confidently and stay focused on your financial goals.
Given the cost of housing in Sydney, this change will likely result in the continuation of the ‘Bank of Mum & Dad’ being asked to help adult children get started in the property market.
If you need help navigating the change, book an appointment with me at Align Financial. Call (02) 9913 9995.
[1] APRA’s letter to the banks about the change is available on their website: https://www.apra.gov.au/activation-of-debt-to-income-limits-as-a-macroprudential-policy-tool
[2] Australian Bureau of Statistics Lending Indicators: Quarterly estimates of new borrower-accepted finance commitments for housing, personal and business loans for the September Quarter 2025, available online at: https://www.abs.gov.au/statistics/economy/finance/lending-indicators/latest-release
