In response to mounting housing prices and rising credit growth, the Australian Prudential Regulation Authority (APRA) announced a major regulatory change affecting home loan lending. From 1 February 2026, authorised lenders will be limited in how many high-risk loans they can issue:

Banks can issue no more than 20% of new mortgage loans with a debt-to-income (DTI) ratio of six times or more (i.e., loans six times the borrower’s income).

The cap applies to both investor and owner-occupier loans — a move aimed at curbing risky lending before it becomes systemic.

The limits do not apply to loans for new builds or bridging finance.

APRA Chair John Lonsdale stated that this safeguards financial stability and helps cool portions of the overheated property market. Analysts say this marks one of the most significant macroprudential shifts in Australian mortgage policy in years.