Banks crack down on high debt-to-income home loans as regulator APRA comes knocking

Two of Australia’s biggest banks have moved to curb high-risk home lending, as the regulator revealed it has been warning some institutions to cut back on risky loans.

This week, ANZ told mortgage brokers and its bankers that from June 6 it would no longer make loans to borrowers who would owe more than seven-and-a-half times their annual income.

That is down from a previous cap of nine times income.

Earlier this month, NAB lowered its debt-to-income (DTI) limit from nine to eight times income.

These moves have the effect of reducing the maximum amount a home buyer or someone refinancing can borrow from what was previously possible.

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