Why Borrowing Capacity Caps Out
Why borrowing capacity reaches a ceiling even when income is strong — the APRA stress buffer, DTI limits, and the mechanics that cap how much lenders will approve.
Core Assessment Analysis
Even if your servicing capacity looks strong, lenders enforce a secondary cap: Debt-to-Income (DTI). DTI is calculated by dividing your total household debt by your gross annual income. APRA flags any application with a DTI of 6x or higher as high risk. If a bank approaches its high-DTI portfolio limit, they will enforce strict manual reviews or place an absolute cap on your mortgage size, regardless of your surplus income.
Why Underwriters Focus Here
High-DTI portfolios increase default risk during cost-of-living increases, triggering regulatory penalties for banks.
Key Outcome Assessment Factors
Your total gross annual income, total mortgage debt balance, and lender-specific portfolio weightings.
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Applications above 6.0x DTI face manual underwriting review.
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