APRA’s new cap means banks can only let up to 20% of their new mortgage flows be at a debt‑to‑income (DTI) of 6x or higher, and it is explicitly aimed at cooling high‑DTI investor borrowing on both new and existing properties. However, loans to build or buy new dwellings are carved out of the cap, so investors targeting new builds are treated more leniently than those buying existing stock.

What APRA has announced

From 1 February 2026, authorised deposit‑taking institutions (banks, etc.) may have no more than 20% of their new mortgage lending at DTI ≥ 6, calculated separately for owner‑occupier and investor books. At present, only around 10% of investor loans and 4% of owner‑occupier loans are above this level, so the cap is a “speed limit” to stop future blow‑outs rather than an immediate hard squeeze on most borrowers.

APRA’s stated concern is that high‑DTI loans – especially to investors – increase systemic risk and can amplify housing price and credit cycles, so the limit is part of its macroprudential toolkit alongside the serviceability buffer and capital settings.

Impact on investors with multiple properties

APRA expects the cap to bite more on investors than owner‑occupiers because investors are more likely to be at DTIs above 6x. The investors most affected are:​



• Highly leveraged portfolio holders whose existing total debt is already at or above ~6x income.​
• Those borrowing from majors that already have a relatively high share of high‑DTI investor loans and must now ration that segment within the 20% quota.​

In practice this can mean:

• Stricter calculators: banks trimming usable income, shading rent more aggressively or applying tighter expense assumptions to keep many borrowers under 6x.​
• More triage at high DTI: investors above 6x may find approvals slower, more conditions attached, or be pushed toward non‑major or niche lenders with more headroom in their high‑DTI bucket.​

For an existing portfolio, the rule doesn’t force you to deleverage, but it can cap incremental borrowing if your next deal would push you above 6x at a lender that is near its quota. It also increases the risk that, in a future downturn or further tightening cycle, APRA could layer on extra investor‑specific constraints.​

New builds vs existing property

APRA has explicitly excluded three loan types from counting towards the 20% high‑DTI cap:

• Loans for construction of new dwellings.
• Loans for the purchase of newly built dwellings.
• Bridging loans for owner‑occupiers.​

The regulator’s rationale is to avoid constraining new housing supply or disrupting normal turnover in the owner‑occupier market. For investors, this means:​

• Buying off‑the‑plan or brand‑new stock can be done at DTIs above 6x without using up the bank’s high‑DTI quota, so lenders have more flexibility to say yes to these deals.​
• Purchasing established dwellings or refinancing investment portfolios at DTIs ≥ 6x will fall inside the cap and face tighter rationing.​

So the rule does impact investors buying existing property or adding to leveraged portfolios, but it is deliberately softer on those funding new construction or newly completed stock. Strategically, a portfolio investor close to 6x DTI may find it easier to execute the next deal as a new build (construction or brand‑new purchase) than as an established dwelling, all else equal.

What APRA actually says

APRA’s own explanation of the exemption is very clear: loans for the construction or purchase of new dwellings and bridging loans for owner‑occupiers are excluded from the 20% high‑DTI cap. The stated reasons are to “avoid constraining incentives for the supply of new housing” and to “enable the smooth functioning of property transactions”, in a context where extra supply can help dampen price and debt growth.​

APRA also stresses this is a macroprudential safety measure, not a housing‑affordability policy: the primary objective is to reduce the share of very high‑DTI loans and limit systemic risk, while trying not to worsen Australia’s existing supply shortage.​

Does it steer investors toward new builds?

Mechanically, yes, there is a directional incentive:

• High‑DTI loans for established properties use up a bank’s 20% quota and will be rationed more heavily.​
• High‑DTI loans for new construction or newly built dwellings do not count toward that quota, giving banks more room to approve them for otherwise similar borrowers.​

Commentary from lenders and mortgage media notes that this structure effectively “favours” new housing, because banks can keep writing high‑DTI loans in that space without breaching APRA’s speed limit. For a leveraged portfolio investor near 6x DTI, that typically translates into: easier approvals, more lender options, and potentially sharper pricing for new‑build deals compared with equivalent established‑property purchases.

So the primary aim is not to “force” investors into off‑the‑plan or construction, but the structure clearly channels the riskiest marginal borrowing (DTI ≥ 6) away from existing dwellings and toward new supply where it is seen as less problematic for system‑level risk. For an investor with a high DTI, this effectively makes new builds the path of least resistance from the regulator’s perspective.

Are you an investor trying to minimize risk when buying a new property? Get in touch with us and we can assist you with the process.