DTIs will start affecting borrowers by the middle of next year

By the second quarter of next year, CoreLogic chief economist Kelvin Davidson reckons they are going to part of the conversation as interest rates drop.

“Borrowers are not going to wake up one day and interest rates have fallen to ‘x percent’ and nobody can borrow. It is not going to be like that.

“It will be more part of a conversation when a borrower is at the bank or in front of a mortgage adviser and will be told they are pushing the DTI limits. It might not stop them getting a loan but it becomes a factor.”

Not many mortgages are now being loaned at high DTI numbers. Reserve Bank data show less than 5% of all loans are currently being done at high DTIs, specifically 2% in September for first home buyers and 3% for investors.