The volume of new loans with a debt-to-income ratio over six increased over the September 2025 quarter, according to APRA, which is moving to curb high-DTI lending.
New loans written to borrowers with high debt-to-income (DTI) ratios rose over the year, according to the latest quarterly statistics from the Australian Prudential Regulation Authority (APRA).
New statistics from APRA for the September 2025 quarter show that the share of new loans with a DTI of six or more reached 6.1 per cent in the September 2025 quarter, up 0.5 percentage points compared with the same period last year.
Concerns about lending to high DTI borrowers have led APRA to pre-emptively step in to curb this type of new lending. From 1 February next year, banks must limit high debt-to-income ratio to 20 per cent of new lending.
However, the share of high loan-to-value ratio (LVR ≥ 80 per cent) loans fell to 16.8 per cent (down 6 basis points), while loans 30–89 days past due eased 11 bps to 0.47 per cent.
Non-performing loans edged higher over the year, rising 0.08 points to 1.04 per cent.
This rise in higher-risk borrowing occurred against the backdrop of another strong year for mortgage growth.
The amount of residential mortgage credit outstanding climbed to a new high of $2.43 trillion in the September quarter, 6 per cent more than the $2.28 trillion owed in September 2024.
According to APRA’s data for authorised deposit-taking institutions (ADIs), investor loans continue to take up a growing share of bank mortgage books. While owner-occupied loans still dominate at 67.3 per cent, this proportion has fallen 42 bps over the year. Investor loans now account for 30.7 per cent of all outstanding mortgages, up 37 bps on September 2024.
New lending was also significantly higher over the year. Banks wrote 19 per cent more new loans in the September 2025 quarter than they did a year earlier, with total new loans funded rising to $196.3 billion (up from $165 billion in the September 2024 quarter).
Investor activity again outpaced owner-occupier growth. The proportion of new loans going to investors rose 1.47 percentage points to 36.5 per cent (just over $71 billion). While owner-occupied lending increased to just under $120 billion, its share of new lending fell from 62.8 per cent in September 2024 to 61.1 per cent in September 2025.
Other risk indicators were mixed. The share of new high loan-to-value ratio (LVR ≥ 80 per cent) loans fell 6 bps to 16.8 per cent, and loans 30–89 days past due dropped 11 bps to 0.47 per cent. However, non-performing loans nudged higher, lifting 0.08 points to 1.04 per cent.
Commercial property exposures also continued to climb, with total exposures rising 8.6 per cent over the year to $471.8 billion and approved limits up 9.2 per cent.
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