Mortgage lending slows to lower DTI rates

This is the lowest share since the data collection began in 2017 and has been declining since the first month of 2021 when the housing market frenzy changed tack. Before that borrowing had been at excessive DTI levels.

For first home buyers (FHB), 29.7% of the value of new mortgages had DTI of 5 in September. This share has fallen from 41.5% in September 2022. A record low share of 28.1% of FHB mortgages had a DTI of 5 in August 2023.

Reserve Bank figures show the shares of new mortgages to each of the other three borrower groups – investors, other owner occupiers with investment collateral and other owner occupiers without investment collateral – with a DTI of 5 were all the lowest since the data collection began.

At the higher level of DTI of 7, the monthly share of new mortgages slumped to 5.2% in September, which is the lowest since the data collection began. This compares with 9.3% in September 2022. The highest share in this series was in January 2021, when 26.5% of new commitments were with a DTI of 7.