APRA’s New 20% Cap on High‑Risk Home Loans: Double Whammy for Australia’s Hot Housing Market
Australia’s banking regulator APRA will cap high debt-to-income mortgages at 20% of new loans from February 2026, targeting loans where debt exceeds six times income. The cap applies separately to owner-occupier and investor lending. Home values have surged 50% since 2020, and typical new mortgages now consume 45% of median household income. Economists warn of possible Reserve Bank rate hikes in 2026.