--- title: "21350 – Banking & Lending Regulation" url: https://australianproperty.network/apn-codex/series-20000/series-21000/series-21300/series-21350/ date: 2026-01-16 modified: 2026-10-06 lang: en author: "APN Academy" description: "APN Codex Node 21350 21300 Series — Legislation & Policy Analysis Policy register Banking & Lending Regulation Loan-size effect −25.2% Period June quarter 2026 Buffer 3.0 points DTI ≥ 6..." word_count: 1596 --- # 21350 – Banking & Lending Regulation - APN Codex Node 21350 21300 Series — Legislation & Policy Analysis Policy register ### Banking & Lending Regulation Loan-size effect−25.2% PeriodJune quarter 2026 Buffer3.0 points DTI ≥ 6 limit20% / 20% Standardised readingNIL by design The headline is a percentage, not a standardised reading: see Section 5. 1Node Definition Banking & Lending Regulation (21350) records the rules the Australian Prudential Regulation Authority (APRA) sets for how banks and other authorised deposit-taking institutions assess and write new home loans. It is a register: each setting is recorded as it stood at the end of every quarter from March 2015, with the date it began or ended and the APRA document that set it. Five settings have applied since December 2014: the **serviceability buffer** (the margin above the loan rate at which a borrower must show they can repay), a **minimum assessment rate**, a **benchmark for growth in investor lending**, a **benchmark for the share of new lending on interest-only terms**, and a **limit on lending at a high debt-to-income ratio**. **What it does not measure.** It records the rules, not how lenders or borrowers respond to them. One response, the first home buyer share of new lending, is read by First Home Buyer Lending Share (21660). The buffer level on its own is also a standardised input to Prudential Policy Settings (24722), and the loan-size headline series is an input to the APN Credit Rationing Index™ (24230), within the APN Risk & Compliance Index™ (24200). 2The Headline: Loan-Size Effect of the Assessment Rules The node’s headline is **how much APRA’s assessment rules reduce the largest loan a borrower can be approved for**, at the average interest rate actually charged on new owner-occupier variable loans. Construction June quarter 2026−25.2% rt, loan rateAverage rate on new owner-occupier variable loans funded in the month: 6.25% in June 2026 (RBA Table F6) bt, APRA buffer3.0 percentage points, so the borrower is assessed at at = 9.25% Ft, minimum assessment rate7% from December 2014 to July 2019; none since PV(i)The loan a repayment of $1 a month can service over a 30-year principal-and-interest term at annual rate i (360 monthly payments) At a loan rate of 6.25%, a borrower must show they can meet repayments at 9.25%. That reduces the largest loan they can be approved for by 25.2% compared with an assessment at the loan rate itself. The 30-year term is a stated convention, as the reference price is in Foreign Investment Policy (21340). The loan rate is the only input that is not an APRA setting. 3The Register: APRA’s Settings Since December 2014 | Setting | Value | In force | Set by | | ------- | ----- | -------- | ------ | | Serviceability buffer (minimum) | 2.0 points | 9 Dec 2014 – 4 Jul 2019 | [Letter to ADIs, 9 Dec 2014](https://www.apra.gov.au/sites/default/files/141209-Letter-to-ADIs-reinforcing-sound-residential-mortgage-lending-practices.pdf) | | Serviceability buffer (minimum) | 2.5 points | 5 Jul 2019 – Oct 2021 | [APRA release and APG 223, 5 Jul 2019](https://www.apra.gov.au/news-and-publications/apra-finalises-amendments-to-guidance-on-residential-mortgage-lending) | | Serviceability buffer (minimum) | 3.0 points | from the end of Oct 2021 | [Letter to ADIs, 6 Oct 2021](https://www.apra.gov.au/strengthening-residential-mortgage-lending-assessments); a prudential-standard requirement from 1 Sep 2022 (APS 220, Attachment C) | | Minimum assessment rate | 7.0% | 9 Dec 2014 – 4 Jul 2019 | [Letter to ADIs, 9 Dec 2014](https://www.apra.gov.au/sites/default/files/141209-Letter-to-ADIs-reinforcing-sound-residential-mortgage-lending-practices.pdf); removed by [the 5 Jul 2019 release](https://www.apra.gov.au/news-and-publications/apra-finalises-amendments-to-guidance-on-residential-mortgage-lending) | | Investor lending growth benchmark | 10% a year | 9 Dec 2014 – 30 Jun 2018 | [Letter to ADIs, 9 Dec 2014](https://www.apra.gov.au/sites/default/files/141209-Letter-to-ADIs-reinforcing-sound-residential-mortgage-lending-practices.pdf); lifted per lender from 1 Jul 2018 ([APRA release, 26 Apr 2018](https://www.apra.gov.au/news-and-publications/apra-announces-plans-to-remove-investor-lending-benchmark-and-embed-better)) | | Interest-only share of new lending | 30% | 31 Mar 2017 – 31 Dec 2018 | [APRA release, 31 Mar 2017](https://www.apra.gov.au/news-and-publications/apra-announces-further-measures-reinforce-sound-residential-mortgage-lending); removed from 1 Jan 2019 ([APRA release, 19 Dec 2018](https://www.apra.gov.au/news-and-publications/apra-to-remove-interest-only-benchmark-for-residential-mortgage-lending)) | | New loans at debt-to-income ≥ 6 | up to 20% of owner-occupier and 20% of investor lending, separately | from 1 Feb 2026 | [APRA letter, 27 Nov 2025](https://www.apra.gov.au/activation-of-debt-to-income-limits-as-a-macroprudential-policy-tool) | Every value is a minimum or a ceiling as APRA states it. Until September 2022 the buffer and floor were supervisory expectations: in 2014 APRA described the 2.0-point buffer and the 10% benchmark as “trigger points for more intense supervisory action”, not hard limits. Since 1 September 2022 the buffer has been a requirement of prudential standard APS 220, at 3.0 points unless APRA determines otherwise, within a range of 2.0 to 5.0. APRA has confirmed the 3.0-point setting in each statement since, most recently on 28 May 2026. 4The Record Node 21350 · Loan-Size Effect Reduction in the Largest Approvable Loan, September 2019 to June 2026 Each point is the reduction at the quarter-end month’s average rate on new owner-occupier variable loans. It was 25.1% in September 2019, rose to 30.5% in March 2022, the first quarters after the buffer went to 3.0 points while loan rates were at their lowest, and stood at 26.2% in December 2025 and 25.2% in June 2026. The effect moves with interest rates even when the rules do not. A buffer of a fixed number of points is a larger share of a low loan rate than of a high one, so the same 3.0-point buffer reduced the largest loan by 30.5% in March 2022, at a loan rate of 2.46%, and by 25.2% in June 2026, at 6.25%. **Before September 2019** the headline is NIL RETURN: no published figure for the average rate on new loans exists before July 2019, and the indicator rates published earlier are above the rates borrowers paid. The rules of that period are shown instead at reference loan rates, which is also where the minimum assessment rate matters: | Loan rate | December 2014 rules (2.0 points, 7% floor) | July 2019 rules (2.5 points) | October 2021 rules (3.0 points) | | --------- | ------------------------------------------ | ---------------------------- | ------------------------------- | | 4.00% | assessed at 7.00%: −28.2% | 6.50%: −24.5% | 7.00%: −28.2% | | 5.00% | 7.00%: −19.3% | 7.50%: −23.2% | 8.00%: −26.8% | | 6.00% | 8.00%: −18.3% | 8.50%: −22.0% | 9.00%: −25.5% | At a loan rate of 4%, the 2014 rules reduced the largest loan by as much as today’s, because the 7% minimum assessment rate bound; at 6%, today’s rules reduce it by 25.5% against 18.3%. 5Why There Is No Standardised Reading Every setting in the register is a step: it holds a value until APRA changes it. A score standardised against 2015–2025 would measure when a setting began, not conditions. The interest-only benchmark, in force for 8 of those 44 quarters, would read the same high score in every one of them, and the debt-to-income limit, which began after that window, would have no score at all. The node therefore publishes the register and the loan-size headline, and **no standardised score or position, by design**. Where the buffer is scored The buffer level is a standardised input to Prudential Policy Settings (24722), within Policy & Regulatory Conditions (24720). This node records the full set of rules and their dates rather than scoring any one of them. 6Methodology & Disclosed Caveats **A change of measure, September 2026.** Before September 2026 this node published a standardised score of APRA’s buffer, dated from 2011. It now records the rules themselves, from APRA’s December 2014 letter, and publishes no standardised score. - **Two benchmarks ended lender by lender.** The investor benchmark was lifted from 1 July 2018 only for lenders whose boards had given APRA the required assurance, and the interest-only benchmark from 1 January 2019 only for those same lenders. APRA did not publish the dates for the rest; the register records the system-wide change. - **The debt-to-income limit began part-way through a quarter,** on 1 February 2026, and is measured each quarter for the largest banks and over a rolling four quarters for others. New construction, newly built dwellings and short-term bridging finance are exempt. - **The headline uses an average rate.** Borrowers with lower or higher rates face a smaller or larger reduction; lenders may also apply their own floors and buffers above APRA’s minimum. - **Qualitative measures are not in the register:** APRA’s 2017 expectation of internal limits on interest-only lending above 80% loan-to-value, its 2018 expectation of internal limits on high debt-to-income lending, and capital measures such as mortgage risk weights, because APRA set no number for them in these instruments. 7Other Components The other seven components of Legislation & Policy Analysis (21300). [Node 21310Tax LawsReads duty collected on property transfers relative to the value of the residential dwelling stock.](https://australianproperty.network/apn-codex/series-20000/series-21000/series-21300/21310-tax-laws/) [Node 21320Planning Regulations & Zoning PolicyReads the share of new dwelling approvals that are not detached houses, as a measure of how far the planning system permits medium- and higher-density supply.](https://australianproperty.network/apn-codex/series-20000/series-21000/series-21300/21320-planning-regulations-zoning-policy/) [Node 21330Housing Policy (Affordable, Social)Reads social housing as a share of all residential dwellings, once a year at 30 June.](https://australianproperty.network/apn-codex/series-20000/series-21000/series-21300/21330-housing-policy-affordable-social/) [Node 21340Foreign Investment PolicyRecords the rules that apply when a foreign person buys residential property, from Commonwealth fees and access rules to state and territory duty and land-tax surcharges.](https://australianproperty.network/apn-codex/series-20000/series-21000/series-21300/series-21340/) [Node 21360Sustainability & Environmental PoliciesCovers the energy and environmental requirements that apply to new homes. No standardised reading is published while a register of these settings is designed.](https://australianproperty.network/apn-codex/series-20000/series-21000/series-21300/21360-sustainability-environmental-policies/) [Node 21370Tenancy & Consumer Protection LawCovers the rules governing residential tenancies. No standardised reading is published while a register of these settings across all eight jurisdictions is designed.](https://australianproperty.network/apn-codex/series-20000/series-21000/series-21300/21370-tenancy-consumer-protection-law/) [Node 21380Housing Policy OutcomesGroups quarterly measures of what housing policy produces, as distinct from the policy settings read elsewhere in this series.](https://australianproperty.network/apn-codex/series-20000/series-21000/series-21300/series-21380/) [Parent branch21300 — Legislation & Policy Analysis](https://australianproperty.network/apn-codex/series-20000/series-21000/series-21300/) 8Register Statement APN Codex Node 21350 — Banking & Lending Regulation — Policy Register - Every setting is taken from an APRA letter, release or prudential standard, dated to its commencement - Register from the March quarter 2015; loan-size headline from the September quarter 2019 - No standardised score or position is published, by design - Findings are presented on the basis of data and evidence alone. ##### Node Parameters Node21350 Series21300 StatusActive · policy register Loan-size effect−25.2% PeriodJune quarter 2026 Buffer3.0 points DTI ≥ 6 limit20% / 20% Standardised readingNIL by design ##### Series Distillation - [EL1 · Plain English](https://australianproperty.network/apn-codex/series-20000/series-21000/series-21300/el1-why-is-property-so-hard-right-now/) - [EL2 · Foundational](https://australianproperty.network/apn-codex/series-20000/series-21000/series-21300/el2-how-government-rules-shape-the-property-market/) - [EL3 · Practitioner](https://australianproperty.network/apn-codex/series-20000/series-21000/series-21300/el3-what-the-laws-are-doing-to-the-market/) - [EL4 · Advanced Practitioner](https://australianproperty.network/apn-codex/series-20000/series-21000/series-21300/el4-the-regulatory-split/) - [EL5 · Expert](https://australianproperty.network/apn-codex/series-20000/series-21000/series-21300/el5-structural-regulatory-configuration-q4-2025/) - [EL6 · Masterful](https://australianproperty.network/apn-codex/series-20000/series-21000/series-21300/el6-structural-architecture-of-residential-policy-failure/) - [21300 — Parent series](https://australianproperty.network/apn-codex/series-20000/series-21000/series-21300/) ##### Related Node - 24722Prudential Policy SettingsScores the buffer level within Policy & Regulatory Conditions (24720)