Why You Need to Check Your Loans URGENTLY! APRA’s New DTI Rules

SugarMamma’s Fireplay

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8d ago 27:47

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In this urgent episode of SugarMamma’s Fireplay, I sit down with senior mortgage broker John Micalizzi from Blue Lantern Home Loans to unpack APRA’s new Debt-to-Income (DTI) rules – what they mean, who’s most at risk, and why you cannot afford to ignore your numbers.

John can assist you with any concerns regarding your DTI.

John' contact details: [email protected] Mobile: 0411 706 228

Blue Lantern address: Level 6, 309 George Street, Sydney, NSW 2000

If you have:

A large mortgage
Investment properties
Interest-only loans
Or you’re planning new lending, refinancing or debt recycling

…this episode is essential listening.

We talk about why this change is a proactive “pre-emptive strike” by APRA, how the new 20% cap on high DTI loans works, and the very real risk of being pushed into higher repayments, forced P&I, or simply being told no by your bank – especially with current backlogs and delays across the major lenders.

What we cover inside the episode

What DTI actually is
– How to calculate it in plain language (total debt ÷ total gross income)
– Why all debts count: mortgages, credit cards, HECS/HELP, personal loans, etc.
APRA’s new DTI rule explained
– The new cap on loans with DTI of 6 or more
– Why APRA has brought this in now as a protective measure
– Why it’s a blanket rule across owner-occupiers and investors
Who’s safe and who needs to worry
– Borrowers with DTI well under 6 vs those above 6
– Why high-debt, high-leverage borrowers and some investors are most exposed
– Why construction and bridging loans are treated differently
Why interest-only borrowers must act early
– How to check when your interest-only term expires
– Why extending I/O is effectively a new application (full reassessment)
– The double hit risk:
1. Rolling from I/O to P&I (big repayment jump)
2. Rolling to an old, uncompetitive “roll-to” rate from years ago
Life changes that can push you into high DTI territory
– Going from two incomes to one (having a family, study breaks, job loss)
– Why timing and lender policy really matter here
– Why you need a broker who knows which lenders can work with maternity leave, self-employed income and more complex scenarios
Pre-approvals and the 1 February deadline
– What to do if your pre-approval expires after 1 Feb
– How your borrowing power could change under the new cap
– Why you may need to reset your expectations on price or timing
Backlogs, complexity and why you can’t leave this to the last minute
– The current delays at many banks for new loans, refinances and restructures
– Why higher DTI = more complexity = more questions = more time
– Why you cannot expect to “sort it out in 48 hours”
Practical steps to protect yourself now
– How to check your own DTI and loan terms
– Cleaning up your debts: unused credit cards, HECS/HELP strategy, etc.
– When you should consider refinancing, restructuring or going P&I on purpose
– Why working with an experienced broker can give you more options, more clarity and someone to advocate for your case with the lender

3 urgent actions after you listen

Jump into your internet banking
– Check: loan types, interest-only vs P&I, and expiry dates on I/O terms.
Roughly calculate your DTI
– Add up all your debts (home loans, investment loans, credit cards, personal loans, HECS/HELP, etc.)
– Divide by your total gross income (yours + partner’s, plus rental income, dividends, etc.).
If your DTI is high OR your interest-only term expires within 12 months
– Do not wait.
– Reach out for advice before the new rules + bank backlogs box you into a corner.

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⚖️ General Advice Warning
While we discuss financial topics, everything shared here is general information only — never personal, product, or investment advice. Always:

Do your own research.

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