A new wave of debt-to-income (DTI) rules is reshaping how banks assess investment borrowers – and some investors who pass traditional serviceability tests are still being turned away.
From 1 February 2026, APRA capped high DTI lending so authorised deposit‑taking institutions can write no more than 20% of new mortgages to borrowers with debt of six times their income or more, a move it says is intended to “pre-emptively contain a build-up of housing-related vulnerabilities in the financial system” as high DTI investor loans rise from a low base.
The 20% limit applies separately to owner‑occupier and investor lending, excludes bridging and new‑build loans, and is designed as a guardrail that will bite hardest on investors if volumes approach the ceiling, while APRA’s 3% serviceability buffer and 1% counter‑cyclical capital buffer remain unchanged.
From February 2026, each bank must make sure that no more than 20% of new owner-occupier loans and no more than 20% of new investor loans go to borrowers with a debt-to-income ratio (DTI) of 6 times or more. Use the slider to see what happens as the share of high DTI loans rises.
Eventus Financial founder and mortgage broker Alex Veljancevski (pictured) said some banks are already moving ahead of the cap.
“Some banks are now limiting their exposure to higher debt-to-income loans more actively,” Veljancevski said. “We're seeing investors who pass the bank's own serviceability assessment – they can clearly afford the repayments – but the application still can't proceed because their total debt is above six or seven times their income."
Although APRA’s cap allows up to six times income, Veljancevski said many lenders have quietly cut their own limits.
“What a lot of people don't realise is that banks aren't waiting to hit the 20% ceiling before they act. Some have already quietly lowered their own DTI limits internally. So even though APRA's rule allows lending up to six times income, certain lenders are pulling back before they reach that threshold. The industry is moving faster than the regulation."
The impact is most visible among investors with multiple properties, where aggregate debt has climbed while mortgage rates and living costs remain elevated. Even with strong rental income and clean credit histories, high DTI ratios can now override borrowing capacity models that would previously have supported the deal.
Because APRA’s DTI cap does not apply to non‑bank lenders, brokers are increasingly considering specialist funders for well‑qualified investors and upsizing first‑home buyers who already own one property.
“Non-bank lenders aren't subject to the DTI cap, so for borrowers who are genuinely in a strong financial position but are being turned away by their bank, there are still real options available,” Veljancevski said.
He cautioned that non‑bank pricing and structures can differ from major banks.
“It's not a straight swap. Non-bank products can come with higher rates or different conditions, so you need to go in with your eyes open and get proper advice,” Veljancevski said.
For brokers, understanding each client’s DTI position – and which lenders are most flexible – will be critical to getting investment deals across the line in 2026.
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