Glossary · Australian property
Debt-to-income ratio (DTI).
Your total debt divided by your gross annual income. APRA flags DTI > 6× as 'high-risk'. Most lenders cap new loans at 6.0-6.5× DTI.
DTI = total debt (new loan + existing loans + credit-card limits + HECS) ÷ gross household income. APRA requires lenders to report new loans above 6.0× DTI and treats them as 'high-risk'. Most major banks cap individual new loans at 6.0-6.5× DTI as policy.
Different from serviceability buffer: serviceability tests cashflow capacity at a stressed rate, DTI tests aggregate leverage. Both must pass. Your loan can fail DTI even if serviceability is strong, and vice versa.
Levers: pay down credit-card limits (banks count the LIMIT, not the BALANCE) before applying. Refinance existing loans to shorter terms (reduces ongoing debt service). Add eligible rental income from existing IPs at 60-80% credit. Brokers know which lender's policy is most generous on each variable.
Source
APRA APG 223; ABS national financial accounts (DTI distribution data).
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