The bank regulator, APRA has announced new lending rules for “borrowers that are deemed to have a high income debt to income ratio” – which is banking code for investors.

The last time they did this, housing prices declined – it took the heat out of the market for about two years.

It’s dressed up as concern about lending defaults -but its to stop people using existing equity to borrow against property for more investment properties.

A high debt to income ratio is considered people taking on debt that is more than six times than annual income. That is unlikely to impact first home buyers, who usually have a much lower debt to income ratio.

Here is the nuts and bolts of it:

From 1 February 2026, APRA will require that banks limit lending to borrowers with high debt to income ratios to only 20 per cent of new loans.

The limit will apply separately to lending to owner-occupiers and investors. APRA will exempt from the debt to income limit lending for the purchase or construction of new homes and bridging loans for owner occupiers.