Sky News Business Editor Ross Greenwood says APRA and the Reserve Bank are worried “people take on mortgages that are way too big".

It comes as last month, Australia's prudential regulator moved to take the pressure off of the housing market, by raising the serviceability buffer used to assess home loans.

It follows several months of warnings from banks and experts about housing prices rising too quickly.

According to documents obtained by The Australian – both APRA and the Reserve Bank were looking into home loan controls as early as February.

“Welcome to the real world where they’re always too slow to act, they’re always reactive, and always after the event, and always terribly cautious about things,” Mr Greenwood told Sky News host Peta Credlin.

“But understand – especially in APRA’s case – it's all about banking stability, as it is for the Reserve Bank.

“What they’re really worried about is that people take on mortgages that are way too big that there is some shock at the end of all of this, and really those people can’t afford it and that ultimately hurts the banks.”

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