Banks ordered to approve fewer risky loans as Australian property market heats up

Regulator announces 20% cap on share of new lending banks can do on mortgages worth more than six times borrower’s incomeFollow our Australia news live blog for latest updatesGet our breaking news email, free app or daily news podcastA crackdown on risky lending will limit banks’ capacity to extend large mortgages, as the financial regulator launches a pre-emptive strike against the growing excesses of an overheated property market.The Australian Prudential Regulation Authority announced a 20% cap on the share of new lending that banks can do at a debt-to-income ratio above six – a mortgage worth more than six times the borrower’s income. While Jim Chalmers said the move would “help with financial resilience and housing affordability”, the Greens immediately criticised it as insufficient. Continue reading...