APRA Lending Changes Explained: How Credit Tightening Impacts Property Investors

What Has APRA Changed?

APRA has introduced stricter controls around debt-to-income (DTI) ratios, which directly affect borrowing capacity.

Under the new framework:

• A DTI above 6 is now considered high-risk lending
• Only around 20% of a bank’s total loan book can sit above this threshold
• The remaining 80% must stay below a DTI of 6

In simple terms, not everyone who qualifies will get approved, even if their application looks strong on paper. As a result, banks are pulling back from higher-risk lending.

This doesn’t ban high-DTI lending, it rations it.

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Why Banks are Pulling Back on Trust Lending

Trust lending became popular because it offered:

• Asset protection
• Flexibility across lenders
• Historically, weaker visibility between banks

However, that last point created a loophole.

What investors were doing

Previously, some investors could:

• Purchase properties in trusts
• Guarantee loans personally
• Appear “clean” on credit reports
• Borrow again at another bank without full exposure being visible

Over time, this allowed significantly higher leverage, sometimes without lenders seeing the full risk picture.

What’s changed

From late 2025 into early 2026:

• Macquarie Bank ceased trust lending altogether
• CBA restricted trust lending to existing clients only
• Westpac limited trust lending to private and business banking
• ANZ reduced LVRs and restricted access
• Non-bank lenders began requiring disclosure of all trust involvement

This wasn’t random. It was coordinated risk management.

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Are Trusts Still Useful For Property Investing?

Yes, but only when used correctly.

Trusts still have a place for:

• Asset protection
• Estate planning
• Sophisticated portfolio structuring

However, they now come with clear trade-offs:

• Lower servicing capacity
• Higher setup and ongoing costs
• Increased scrutiny across lenders
• Land tax threshold implications (state-dependent)

Trusts are no longer a default growth tool. They are a strategic tool, and only make sense when aligned with the investor’s broader plan.

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Who Benefits From Tighter Credit?

• Investors with existing equity
• Borrowers with strong income and structure
• Early movers who act before policy tightens further

Those waiting risk losing access altogether.

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Why Waiting Can Cost You Borrowing Power

One of the biggest mistakes investors make is assuming: “I can always buy later.”

History shows the opposite.

When APRA intervenes:

• Rules change quickly
• Options disappear overnight
• Borrowing capacity shrinks permanently

This played out in previous cycles, and it’s playing out again now.

The opportunity window isn’t about rushing into poor decisions.
It’s about having a framework and acting when capacity exists.

At Search Property, we don’t just look at properties, we look at:

• Lending rules
• Structure
• Timing
• Long-term portfolio outcomes

We ensure our clients are prepared and have a strategy designed for long-term success and wealth-building. Preparation is what separates investors who build wealth from those who get stuck.

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Ready to Build a Successful Property Portfolio?

At Search Property, we help Australians create data-driven property investment strategies aligned with long-term wealth goals. Book a FREE investment assessment with Search Property. We’ll discuss your goals and position, and help you build a clear plan to move forward with confidence.