What is the APRA serviceability buffer?

The buffer is the main reason your borrowing power is lower than your actual repayments suggest you could afford. Below is how it works, what it does to borrowing power in real dollars, and the separate debt-to-income limit that started in February 2026. To see your own figure, use the borrowing power calculator, which applies the buffer automatically.

How the serviceability buffer works

When you apply for a loan, the lender works out how much of your income is left after tax, living expenses and other debts. It then asks: could this surplus cover repayments if the interest rate were 3 points higher than the rate you will actually pay?

On a $600,000 loan over 30 years:

• Your actual repayment at 6.50% is $3,792 a month.
• The lender tests you at 9.50%, which is $5,045 a month.

You need to show a monthly surplus of about $5,045, not $3,792, to be approved. The idea is that you could keep paying if rates rose sharply after you borrow.

How much the buffer reduces borrowing power

Buffer	Single, $100,000 income	Couple, $180,000 income, 2 children
3.0 points (current)	$470,000	$865,000
2.5 points	$491,000	$904,000
2.0 points	$514,000	$946,000
No buffer	$625,000	$1,151,000

Each half point of buffer is worth roughly $20,000 to $40,000 of borrowing power for these households. That is why the buffer is debated every time house prices rise.

A short history of the buffer

Date	Buffer
December 2014	Introduced at 2 points (with a minimum floor rate)
July 2019	Set at 2.5 points, floor rate removed
October 2021	Raised to 3 points
May 2026	Confirmed at 3 points

The 6 times income limit from February 2026

On top of the buffer, APRA switched on debt-to-income (DTI) limits from 1 February 2026. Banks can only write a limited share of new loans (20% under the current setting) to borrowers whose total debt is 6 or more times their gross annual income.

• Total debt includes the new mortgage, other home loans, car and personal loans, and credit card limits.
• HECS-HELP debt is excluded from the DTI measure, although lenders still count HELP repayments when checking your budget. See does HECS affect borrowing power.
• It is not a ban. A loan at 6 times income or more can still be approved, but lenders are more selective.

For example, a couple earning $180,000 between them would reach 6 times income at $1,080,000 of total debt.

Does every lender use the buffer?

The 3 point buffer is APRA’s minimum expectation for the banks and other deposit-takers it regulates. Some lenders also apply a minimum assessment rate. Non-bank lenders are not regulated by APRA and may use a different buffer, although most use something similar. A mortgage broker can tell you which lenders assess differently.

How to borrow more within the rules

• Close credit cards you don’t use, because lenders count the limit, not the balance.
• Pay down car and personal loans before applying.
• Choose a 30-year term, which lowers the assessed repayment.
• Apply with a second income if you can.
• Look at the 5% Deposit Scheme if a large deposit is the barrier rather than income.

Rate rises shrink borrowing power twice over, because the buffer sits on top of a higher rate. See how much repayments have risen in 2026, then run your numbers in the borrowing power calculator.

Frequently asked questions