Welcome to this week’s Friday Wealth Coffee Chats with Sarah Shome from the lending and finance team.

While most borrowers are focused on the recent 0.25% rate rise from the Reserve Bank of Australia, there’s another major shift happening behind the scenes — and it could have an even bigger impact on your borrowing power.

This month, APRA activated a 20% cap on high debt-to-income (DTI) lending for deposit-taking institutions. In simple terms, banks can now only allocate one in five loans to borrowers whose total debt exceeds six times their income.

In this episode, we break down:

• What the recent rate rise actually means in real dollar terms
• Why investor rates are now comfortably in the sixes
• How banks assess serviceability using higher stress-test buffers
• What DTI (Debt-to-Income ratio) really is — and how to calculate yours
• Why property investors and multi-property owners may feel the biggest impact
• How borrowing is now being “rationed” across lenders

We also explore alternative lending pathways, including non-bank lenders like Pepper Money, Liberty Financial, and Firstmac, which are not subject to the same DTI caps — though they may come at a premium.

Plus, we discuss:

Why new construction builds are exempt from the DTI cap

How unused credit cards and small debts can significantly hurt your borrowing power

Why refinancing may now be more complex

The key questions you should be asking your broker right now

With persistent inflation still a concern, these lending rules may be here for a while. That means strategy matters more than ever. It’s no longer just about finding the best investment — it’s about structuring your lending correctly so you can continue to grow within the new limits.

If you’re planning to refinance, invest, or expand your portfolio, this is a must-listen episode to stay ahead of the changing lending landscape.

Enjoy the episode — and have a great weekend.