G'day.
Two pieces of news landed this week that tell the same story from opposite ends.
On Monday, APRA's latest banking statistics showed mortgage lending growth at the big five is slowing — and the pullback is uneven, with the investor books shrinking faster than owner-occupier. And through August, brokers have been telling anyone who'll listen the same thing the Brisbane Times put on its front page: "declare everything" — because it may be harder to get a mortgage right now than at any point since the credit crunch of 2019.
Not because rates are higher than they were — the cash rate has sat at 4.35% since the August 11 hold, the second consecutive pause after three hikes in the first half of the year. It's harder because the assessment has changed. This post is about what the assessor's desk actually looks like in September 2026.
The three-headed squeeze
Borrowing capacity is being compressed by three things at once, and they compound:
1. Sticky assessment rates. With variable rates around 6.2–6.5% and APRA's 3% buffer untouched at its July review, you're still being assessed at roughly 9.2–9.5% — the maths we ran in the APRA buffer piece. That's about $200k of capacity gone on a $100k income before anyone opens your bank statements.
2. The DTI cap is now binding at the margin. APRA's 6x debt-to-income limit (capped at 20% of new lending from February) has moved from a theoretical ceiling to a live constraint. Brokers reported as early as March that investors who pass traditional serviceability are being declined on DTI alone. With the average new loan now at $735,000 (ABS), a household needs roughly $125k+ of assessable income and clean debts to stay under 6x.
3. Forensic living-expense verification. This is the part that's genuinely new in feel, if not in law. Lenders have always been required to verify expenses, but the 2026 version is different in degree:
- 90 days of transaction statements, categorised line by line — not the Household Expenditure Measure benchmark, your actual spend, with HEM used only as a floor.
- Subscription and discretionary scrutiny. Streaming services, gym memberships, Afterpay/Zip balances, regular Uber Eats — assessors are treating recurring discretionary spend as committed expenditure.
- Undeclared debts are being caught. Comprehensive Credit Reporting means your Buy Now Pay Later accounts, that novated lease, and the credit card you forgot about are visible. An inconsistency between what you declared and what CCR shows is now a common decline trigger — hence "declare everything."
- HECS is back in the conversation. With the 2026–27 marginal repayment thresholds in force, a $100k earner with HECS loses roughly $40k of capacity — and assessors are asking about student debt balances explicitly.
Why the banks are doing this now
It's tempting to read this as banks being difficult. The APRA data suggests something more mechanical: with three cash rate hikes landing in the first half of 2026, scheduled mortgage payments as a share of household disposable income are back near their 2024 peak (the RBA's own words in the August Statement on Monetary Policy). Arrears are still low, but the buffer of pandemic-era savings is gone for the marginal borrower.
Add the post-reform investor settings — the negative gearing and CGT changes that triggered June's lender serviceability rewrite — and banks have both a regulatory reason and a commercial reason to lend less to the marginal file. Slower lending isn't a bug of the current settings; it's the intended outcome.
What actually gets a file through in September 2026
Everything below is boring. All of it works.
- Run your own 90-day audit before the bank does. Go through three months of statements. Cancel subscriptions you don't use, kill the BNPL accounts, and know what your real monthly spend is — because that's the number you'll be assessed on.
- Declare everything, first time. Every card, every limit, every HECS balance, every dependant. CCR means the lender sees it anyway; an omission reads as either sloppy or dishonest, and both are decline-worthy.
- Cut limits, not just balances. An unused $10k card limit costs roughly $30–40k of capacity. Close it four weeks before you apply so the closure shows on your file.
- Stabilise your spending 3 months out. A clean 90-day window — no gambling transactions, no cash advances, no bounced direct debits — is worth more than most rate negotiation.
- Get your investment paperwork into one place. If rent is part of your income story, expect it to be shaded to 70–80% and verified against actual statements, not a lease. Being able to hand a broker a complete rent and expense history for every property in minutes is the difference between a two-week approval and a six-week one. (That handover is literally what PropAlly is built for.)
- Shop policy, not just rate. The spread between the most and least generous lender for an investor file is unusually wide right now — different rent shading, different HECS treatment, different DTI headroom. A broker running your scenario across 3–4 lenders before any application hits your credit file is the single highest-value step.
What I'm watching
- The October APRA review. A buffer cut to 2.5% would restore roughly 6–10% of capacity overnight — the single biggest lever in the country. Nothing yet suggests it's live, but the slowing lending data builds the case.
- Whether the big-bank pullback spreads to non-majors. Monday's APRA data showed the slowdown is uneven; if second-tier lenders hold their investor appetite, that's where the capacity will be.
- The next RBA meeting. Every hold keeps assessment rates near 9.5%. A cut flows through to assessed capacity roughly one-for-one.
The ten-minute version
The borrowers getting approved in this market aren't richer than the ones getting declined — they're more organised. Complete statements, declared debts, documented rent, clean 90-day conduct. Founding-member beta is still open: 12 months of Pro, free, for 30 days of real use and a 30-minute feedback call. Apply here.
— PropAlly, Brisbane
General information only — not financial, tax, or credit advice. Lender and regulator policies change frequently; confirm current rules with a licensed mortgage broker before acting.
