An impending change could reduce how much some borrowers can borrow – but the impact will vary widely between authorised deposit-taking institutions (ADIs) that issue home loans.
From 1 February 2026, ADIs must ensure no more than 20% of their new home loans go to borrowers whose loan size is six times their income or more. For context, that would mean a loan of more than $600,000 for someone earning $100,000 a year.
The new rule aims to cool higher-risk lending and keep the financial system stable.
What is an ADI?
An ADI is a financial institution licensed by the government to hold your money, which includes all the major banks you know – CBA, Westpac, NAB and ANZ – along with many smaller banks, credit unions and building societies. Non-bank lenders aren’t ADIs because they don’t take deposits; they only offer loans.
Five key takeaways
- Some borrowing limits may tighten if your income and loan size sit near the threshold.
- Different ADIs, different results – lenders interpret the rules differently, so borrowing capacity can vary a lot.
- A bigger deposit helps – lowering the loan-to-income ratio can expand your options.
- Income matters – even a small rise can improve your position.
- Broker guidance is crucial – especially when lenders start applying their own internal policies on top of this new rule.
Wondering how the changes affect your borrowing power? Contas Us so that I can compare lenders and help you find a structure that fits your plans.