Debt-to-Income Ratio

Plain-English definition. The debt-to-income (DTI) ratio is the multiple of your gross annual household income represented by your total debts, including the mortgage you're applying for. A DTI of 6 means total debts are six times annual gross income.

How it works in Australia. From 1 February 2026, APRA limits the share of new bank lending at DTI ≥ 6 to 20% of new owner-occupier lending and separately 20% of new investor lending. This is a lender portfolio limit, not an individual approval cutoff. Total known debts can include the new mortgage, existing mortgages, credit card limits, HELP debt, personal loans and consumer-finance limits. Income and debt treatment can vary by lender. Check the mathematical multiple with the debt-to-income ratio calculator.

Concrete example. A couple earning $200,000 combined gross with $15,000 in credit card limits, $40,000 in HELP debt, applying for a $1.4m mortgage has total known debts of $1,455,000 and DTI of 7.28. That is above APRA's portfolio-measure threshold, but it does not by itself say whether a lender will approve or decline the application.

Common confusion. DTI is not the same as serviceability. A high-income borrower may pass serviceability (cash flow at a stressed rate) but fail DTI policy because the loan is too large relative to income. Conversely, a low-DTI loan can fail serviceability if expenses or other commitments crowd out cash flow.