In this urgent episode of SugarMamma’s Fireplay, I sit down with senior mortgage broker John Micalizzi from Blue Lantern Home Loans to unpack APRA’s new Debt-to-Income (DTI) rules – what they mean, who’s most at risk, and why you cannot afford to ignore your numbers.

John can assist you with any concerns regarding your DTI.

John' contact details: john@bluelantern.com.au Mobile: 0411 706 228

Blue Lantern address: Level 6, 309 George Street, Sydney, NSW 2000

If you have:

A large mortgage
Investment properties
Interest-only loans
Or you’re planning new lending, refinancing or debt recycling

…this episode is essential listening.

We talk about why this change is a proactive “pre-emptive strike” by APRA, how the new 20% cap on high DTI loans works, and the very real risk of being pushed into higher repayments, forced P&I, or simply being told no by your bank – especially with current backlogs and delays across the major lenders.

What we cover inside the episode

What DTI actually is
– How to calculate it in plain language (total debt ÷ total gross income)
– Why all debts count: mortgages, credit cards, HECS/HELP, personal loans, etc.
APRA’s new DTI rule explained
– The new cap on loans with DTI of 6 or more
– Why APRA has brought this in now as a protective measure
– Why it’s a blanket rule across owner-occupiers and investors
Who’s safe and who needs to worry
– Borrowers with DTI well under 6 vs those above 6
– Why high-debt, high-leverage borrowers and some investors are most exposed
– Why construction and bridging loans are treated differently
Why interest-only borrowers must act early
– How to check when your interest-only term expires
– Why extending I/O is effectively a new application (full reassessment)
– The double hit risk:
1. Rolling from I/O to P&I (big repayment jump)
2. Rolling to an old, uncompetitive “roll-to” rate from years ago
Life changes that can push you into high DTI territory
– Going from two incomes to one (having a family, study breaks, job loss)
– Why timing and lender policy really matter here
– Why you need a broker who knows which lenders can work with maternity leave, self-employed income and more complex scenarios
Pre-approvals and the 1 February deadline
– What to do if your pre-approval expires after 1 Feb
– How your borrowing power could change under the new cap
– Why you may need to reset your expectations on price or timing
Backlogs, complexity and why you can’t leave this to the last minute
– The current delays at many banks for new loans, refinances and restructures
– Why higher DTI = more complexity = more questions = more time
– Why you cannot expect to “sort it out in 48 hours”
Practical steps to protect yourself now
– How to check your own DTI and loan terms
– Cleaning up your debts: unused credit cards, HECS/HELP strategy, etc.
– When you should consider refinancing, restructuring or going P&I on purpose
– Why working with an experienced broker can give you more options, more clarity and someone to advocate for your case with the lender

3 urgent actions after you listen

Jump into your internet banking
– Check: loan types, interest-only vs P&I, and expiry dates on I/O terms.
Roughly calculate your DTI
– Add up all your debts (home loans, investment loans, credit cards, personal loans, HECS/HELP, etc.)
– Divide by your total gross income (yours + partner’s, plus rental income, dividends, etc.).
If your DTI is high OR your interest-only term expires within 12 months
– Do not wait.
– Reach out for advice before the new rules + bank backlogs box you into a corner.

💬 Let’s Keep the Conversation Going

I’d love to hear your thoughts on this episode! Reach out to me anytime on Instagram @SugarMammaTV so we can keep this important conversation alive.

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⚖️ General Advice Warning

While we discuss financial topics, everything shared here is general information only — never personal, product, or investment advice. Always:

Do your own research.

Weigh up the pros, cons, fees, caps, taxes, and risks.

Seek professional advice before making financial decisions.

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The information in this podcast does not take into account your personal circumstances, goals, or needs. Always read relevant Product Disclosure Statements before acquiring any financial product, and seek independent financial advice where appropriate.

Canna Campbell is an Authorised Representative and Financial Adviser of Links Licensee Services Pty Ltd (AFSL No. 700012 | ABN 97 678 975 589).

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