Is now the time to access equity? APRA changes coming + Interest rate outlook

There are signals pointing to it being a great time to release equity right now. Whether that be to jump on future investment opportunities in shares or property or whether you are looking to renovate.  

With property prices up over the last few year and interest rates 0.75% lower than their post covid peaks your borrowing capacity may be higher now than it has been for a few years….and importantly higher than it may be in the near future. APRA and Interest rate changes potentially coming! 

How an equity release is structured

Generally, we would look to structure your equity release so that you don’t pay interest and have no repayments on these funds until used. 

For example, say you owe $500,000 currently and your property is worth $1,000,000. Keeping the loan to value ratio at 80% you have $300,000 in borrowable equity available. Ideally this new $300,000 loan would have IO repayments and an attached offset or redraw capability, so no repayments are required, and no interest would be charged until used. 

APRA Changes announced

Apra has just announced that from early next year (1 February) banks will be limited to lending not more than 20% of their total lending at Debt To Income ratios of 6 or more. Currently banks are already lending under this cap as a percentage of all loans, so we don’t expect massive changes initially at least.  

In simple terms if a borrower’s income is $100,000 pa (gross) then the maximum loan allowed at a DTI of 6 would $600,000.  

In practice most loans we do are under 6 DTI anyway due to other serviceability hurdles. 

There has also been changes to trust and company lending at CBA and Macquarie in the last few weeks due to APRA concerns about over exposure to investor lending.

So possibly more changes to come. 

Inflation data summary released on 26th November  

The last 2 inflation readings from the ABS have come in hotter than expected (see below released 26th November). Consequently, future rate cuts are now looking more unlikely.  

If rates were to increase borrowing capacity will decrease. 

If rates stay the same for a protracted period borrowing capacities will still reduce over time as each quarter lenders are obliged to increase their minimum living expense thresholds (in line with inflation).  

• The Consumer Price Index (CPI) rose 3.8% in the 12 months to October 2025, up from 3.6% in the 12 months to September 2025. 
• Trimmed mean inflation was 3.3% in the 12 months to October 2025, up from 3.2% in the 12 months to September 2025. 

Conclusion 

Borrowing capacities may be at a peak right now in general so accessing your equity now while you can, may be the smart play. 

Feel free to contact us to run the numbers on your borrowing capacity and do valuations on your properties to see if feasible.