Australia’s banking regulator tightened rules on bank lending for mortgages as it seeks to preemptively contain emerging risks from highly leveraged borrowers that could cause vulnerabilities in the housing market.
The Australian Prudential Regulation Authority said from Feb. 1, the limit on home loans will allow authorized deposit taking institutions (ADIs) to lend up to 20% of their new mortgage lending at debt six times income or more, according to a statementBloomberg Terminal Thursday. The limit will apply separately to their owner-occupier and investor loans.
Australia Tightens Rules on Riskier Mortgage Lending for Banks
