What is debt-to-income ratio — and why does DTI matter?
Debt-to-income ratio, or DTI, is one of the ways lenders look at how much debt you carry compared with what you earn.
It sounds more dramatic than it is. The useful part is understanding what goes into the number, why 6x income now matters under APRA's 2026 lending rules, and why a higher DTI does not automatically mean your home-loan application is over.
For Australian home buyers, refinancers and property investors.
Think of DTI as a debt-to-income snapshot.
If a household has $900,000 in total debt limits and $150,000 in verified gross annual income, the DTI is:
What is a debt-to-income ratio?
In Australian mortgage lending, DTI is a leverage measure. APRA defines it as the ratio of the credit limit of all debts held by the borrower to the borrower's verified gross annual income.
Example: $900,000 ÷ $150,000 = 6.0x DTI
The word “limits” matters.
A credit card with a $20,000 limit can affect DTI even when its current balance is $0. DTI is not simply “your new mortgage divided by your salary”.
Which debts are included in DTI?
APRA's reporting definition is deliberately broad. Where known to the lender, the credit limits of debts can include the following.
Home loans
Your proposed mortgage plus other owner-occupied and investment home-loan debt.
Personal & car loans
Personal loans, vehicle finance and other consumer-finance facilities can form part of total debt.
Credit cards
The available credit limit matters, not just the amount owing on the day you apply.
HELP / HECS
APRA has clarified that HELP and HECS debts are included for DTI reporting purposes.
Buy now, pay later
Known BNPL debt can also be included in the DTI calculation.
Other known debt
Margin lending and other debts held with other parties can also be included where known.
Estimate your debt-to-income ratio
This simple calculator is designed as a conversation starter, not a lender credit decision. Enter annual gross income and the relevant debt or credit limits you expect to have after the proposed transaction.
Please enter at least one applicant's gross annual income before calculating.
Enter your numbers
We'll compare your entered debt limits with your entered gross annual income.
Estimate onlyImportant: this is not a lender servicing calculator and does not determine borrowing capacity or loan approval. Lenders may verify, classify or treat income and liabilities differently under their own credit policies.
What does a DTI of six mean in Australia?
From 1 February 2026, APRA-regulated banks became subject to a high-DTI lending limit. An ADI can have up to 20% of new owner-occupier lending and up to 20% of new investor lending at a DTI of six times income or more. The two portfolios are measured separately.
It is a portfolio limit
A DTI of 6.0 or more does not create an automatic borrower-level ban. It places the loan into APRA's high-DTI category for the bank's portfolio management.
Banks still have room to lend
Subject to their own credit policy, lenders can still approve some loans at or above 6x DTI while managing their high-DTI lending within APRA's limits.
So, is 6x the maximum DTI in Australia?
No. It is the threshold APRA currently uses to define high-DTI lending for this macroprudential limit. A borrower may still be approved above 6x if the lender's policy and assessment allow it.
DTI, serviceability and LVR are different
All three can matter in a home-loan application, but they answer different questions.
Debt-to-income ratio
Question: how much total debt does the household carry relative to annual gross income?
Serviceability
Question: can the household reasonably meet repayments and living costs under the lender's assessment assumptions?
Loan-to-value ratio
Question: how large is the loan relative to the value of the property securing it?
How the same borrower can change their DTI
Because DTI responds to both debt and income, relatively small changes can sometimes move a borrower across the 6x threshold.
| Scenario | Total debt limits | Gross annual income | DTI | Indicative category |
|---|---|---|---|---|
| Base example | $900,000 | $150,000 | 6.00x | APRA high-DTI |
| $20k unused card limit closed | $880,000 | $150,000 | 5.87x | Below 6x |
| Verified household income rises to $160k | $900,000 | $160,000 | 5.63x | Below 6x |
Examples are illustrative only and do not represent lender approval criteria.
What can you do if your DTI is high?
A high DTI does not automatically mean “no”. It means the structure of the application deserves a closer look.
Review unused credit
Unused credit-card and other revolving limits can still increase total credit exposure. Reducing or closing facilities you genuinely no longer need may lower DTI.
Confirm all eligible income
Make sure the application captures income that can be properly verified and accepted. The lender will still apply its own policy to different income types.
Check lender policy early
For higher-DTI borrowers, lender selection becomes especially important because serviceability rules, credit policy and appetite can differ.
Avoid gaming the calculation. The objective is not simply to force a ratio below six. The loan still needs to be appropriate, affordable and supported by the borrower's actual circumstances.
Are any loans excluded from APRA's high-DTI limit?
APRA's activated limit contains carve-outs designed to avoid unnecessarily restricting new housing supply and normal property transitions. These include qualifying owner-occupier bridging loans and lending for the construction or purchase of newly erected dwellings.
That does not mean those applications bypass normal credit assessment. It means qualifying loans can be excluded from the particular 20% high-DTI portfolio limit.
Debt-to-income ratio FAQs
What is a good debt-to-income ratio in Australia?
There is no single DTI that guarantees approval. A lower ratio generally represents less leverage, but lenders assess DTI alongside serviceability, LVR, expenses, credit history, income quality, loan purpose and their own policy. APRA currently defines DTI of 6x or more as high-DTI lending for its portfolio limit.
Is a DTI over 6 automatically declined?
No. APRA's 2026 rule is a lender portfolio limit, not a universal borrower-level ban. An APRA-regulated bank may still approve loans at DTI 6x or above, subject to its credit policy and its management of the high-DTI lending limit.
Do credit cards count towards DTI?
Yes. APRA's definition refers to credit limits, so an available credit-card limit can count even if the card has little or no balance outstanding.
Does HECS or HELP count towards DTI?
Yes. APRA has specifically clarified that HELP and HECS debt is included for DTI reporting purposes.
Does rental income help DTI?
Verified gross income forms the denominator of DTI, so accepted income can affect the ratio. The exact treatment and verification of rental income in a credit application remains subject to the lender's policy.
Is DTI the same as borrowing capacity?
No. DTI is a leverage ratio. Borrowing capacity or serviceability is a separate assessment of repayments, income, expenses, other commitments and stressed interest-rate assumptions.
Does APRA's 20% limit apply separately to investors?
Yes. The limit applies separately to an ADI's owner-occupier and investor lending portfolios, with up to 20% of new lending in each category permitted at DTI of 6x or more.
Can a mortgage broker help with a high DTI?
A broker can help identify the debts and income affecting the ratio, compare lender policies and assess the application alongside serviceability and other lending criteria. The goal is to find a structure and lender that fit the borrower's real circumstances — not just chase one number.
Your DTI is one number. Your home-loan application is the whole picture.
If your ratio is sitting near or above 6x, it is worth checking the application before assuming the answer is no. We can look at the debts driving the number, the income that can be verified, lender policy and the actual serviceability position.
General information only: This page provides general information and does not constitute personal financial, credit, tax or legal advice. Lending criteria, credit policies and regulatory settings can change. Any home-loan application is subject to the lender's assessment, eligibility requirements and responsible lending obligations.
Primary sources: APRA — Macroprudential Policy credit measures; APRA — Activation of debt-to-income limits; APRA — May 2026 policy settings; RBA — Financial Stability Review, March 2026.