Nov 27 (Reuters) – Australia’s banking regulator will impose its first cap on high debt-to-income home loans from February, moving to curb housing risks as property prices surge and credit growth accelerates.
The Australian Prudential Regulation Authority (APRA) said on Thursday authorised institutions will only be allowed to issue up to 20% of new home loans at six times borrowers’ income or higher. The cap will apply to owner-occupier and investor lending but will not be imposed on new housing.
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About 10% of new investor loans and 4% of owner-occupied loans sit at or above the six times debt-to-income level at the moment, according to APRA figures.
Australia to cap high debt-to-income home loans from February to curb housing risks
